Here's Why You Should Hold NMI Holdings (NMIH) Stock Now
NMI Holdings Inc. NMIH has been gaining momentum on the back of new business production, growth in the capital and reinsurance markets, improved total mortgage origination volume and flexible liquidity.
Growth Projections
The Zacks Consensus Estimate for NMI Holdings’ 2023 earnings is pegged at $3.68 per share, indicating an 8.55% increase from the year-ago reported figure on 9.4% higher revenues of $572.81 million.
The consensus estimate for 2024 earnings is pinned at $3.94 per share, indicating a 6.9% increase from the year-ago reported figure on 7.4% higher revenues of $615.24 million.
Northward Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 2.8% and 0.5% north, respectively, in the past 30 days, reflecting analysts’ optimism on the stock.
Earnings Surprise History
NMI Holdings has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 5.32%.
Return on Equity (ROE)
NMI Holdings’ ROE for the trailing 12 months is 18.4%, which is better than the industry average of 6.7%. The metric expanded 110 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Zacks Rank
NMI Holdings currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 26.9%, outperforming the industry’s increase of 14.3%.
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Style Score
NMIH has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
NMI Holdings continues to benefit from new business production, robust growth in high-quality and short portfolios as well as continued success in the capital and reinsurance markets.
By virtue of the resiliency and stability of the housing market, growth in total mortgage origination volume and increasing size of the U.S. mortgage insurance market, new insurance written (NIW), the primary driver of insurance-in-force (IIF) of National MI, is expected to improve. Also, continued expansion of customer franchise, and growth in monthly and single premium policy production tied to the rise in customer franchise and market presence are expected to drive NIW of NMIH.
NMI Holdings expects persistency to continue improving and driving further increases in the embedded portfolio value for the year. NMIH remains well-poised to gain from the growth of IIF, increased policy pricing and higher single premium policy cancellations, which continue contributing to net premiums earned, one of the major determinants of revenue growth.
Net investment income is expected to improve as the company would roll over more maturities at favorable and higher rates.
NMI Holdings boasts a strong capital position and had total PMIERs available assets of $2.5 billion and net risk-based required assets of $1.3 billion at the second-quarter end. Year to date, NMIH has repurchased shares for $41.1 million. Currently, it has $27.7 million remaining under authorization.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. ACGL, Axis Capital Holdings Limited AXS and Kinsale Capital Group, Inc. KNSL. While Arch Capital and Axis Capital sport a Zacks Rank #1 (Strong Buy) each, Kinsale Capital carriesn a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 18.8%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has lost 0.2%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
Kinsale Capital beat estimates in each of the last four quarters, the average being 14.88%. In the past year, KNSL has gained 42.1%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.3% and 3.1% north, respectively, in the past seven days, reflecting analysts’ optimism.
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Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
NMI Holdings Inc (NMIH) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
