Here's Why You Must Buy NMI Holdings (NMIH) Stock Right Now
NMI Holdings Inc.’s NMIH new business production, growth in the capital and reinsurance markets, improved total mortgage origination volume, and flexible liquidity make it worth adding to one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for NMI Holdings’ 2023 earnings is pegged at $3.79 per share, indicating an 11.8% increase from the year-ago reported figure on 10.4% higher revenues of $577.77 million.
The consensus estimate for 2024 earnings is pinned at $4.03 per share, indicating a 6.4% increase from the year-ago reported figure on 7.4% higher revenues of $620.49 million.
Northward Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.2% and 0.2% north, respectively, in the past seven days, reflecting analysts’ optimism on the stock.
Earnings Surprise History
NMI Holdings has a decent earnings surprise history. It beat estimates in three of the last four quarters while matched in one, the average being 4.48%.
Return on Equity (ROE)
NMI Holdings’ ROE for the trailing 12 months is 18.1%, which is better than the industry average of 7.1%. This reflects its efficiency in utilizing shareholders’ funds.
Zacks Rank
NMI Holdings currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 42%, outperforming the industry’s growth of 12.4%.
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Style Score
NMIH has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best opportunities in the value investing space.
Attractive Valuation
NMIH shares are trading at a price-to-book value multiple of 1.35, lower than the industry average of 1.45. It also has an impressive Value Score of A. This style score helps find the most attractive value stocks.
Business Tailwinds
This property and casualty insurer continues to benefit from business production, robust growth in high-quality and short portfolios, and continued success in the capital and reinsurance markets.
New insurance written (NIW) — the primary driver of insurance-in-force (IIF) of National MI — is expected to improve 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. Also, the 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 a rise in IIF, increased policy pricing and higher single-premium policy cancellations, which continue to contribute to net premiums earned, one of the major determinants of revenue growth.
Net investment income is expected to improve as the company will roll over more maturities at favorable and higher rates.
NMI Holdings boasts a strong capital position, and had total PMIERs available assets of $2.6 billion and net risk-based required assets of $1.4 billion at the third-quarter end. Year to date, NMIH has repurchased shares for $60.5 million. Currently, the insurer has $208.5 million remaining under authorization.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are RLI Corp. RLI, Kinsale Capital Group, Inc. KNSL and Cincinnati Financial Corporation CINF, each carrying a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RLI has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average being 145.76%. In the past year, RLI has lost 0.2%.
The Zacks Consensus Estimate for RLI’s 2023 and 2024 earnings per share is pegged at $4.80 and $5.56, indicating year-over-year increases of 2.3% and 15.8%, respectively.
Kinsale Capital has a solid record of beating earnings estimates in each of the last trailing four quarters, the average being 14.25%. In the past year, KNSL has gained 24.1%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $12.06 and $14.72, indicating year-over-year increases of 54.6% and 22%, respectively.
Cincinnati Financial has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average being 38.33%. In the past year, CINF has gained 0.1%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5.58 and $6.05, indicating year-over-year increases of 31.6% and 8.4%, respectively.
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RLI Corp. (RLI) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
NMI Holdings Inc (NMIH) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
