MGIC Investment Corp. MTG recently announced its August 2019 operating business statistics. Insurance in force was $21 billion, up 6.2% year over year. Delinquency loans (loans that failed to pay back) at MGIC Investment declined on a year-over-year basis. Delinquent inventory decreased 10.3% year over year to 30,276.
New delinquency notices increased 6% year over year to 4,722 in the month.
The company’s performance, over the past several quarters, has been aided by improving housing market fundamentals such as household formation and home sales and capital status. MGIC Investment is one of the six private mortgage insurers operating in the competitive industry and currently holds 18% market share. It expects to have 19-20% of market share in the industry in which it operates.
Strengthening purchase mortgage market and mortgage insurer’s solid market share (measured by new insurance written) have been driving new business. Given the strong purchase market and potential share gain from FHA, the company anticipates strong writing in 2019 on the back of new business and strong persistency. Also, improving housing market fundamentals should support this Zacks Rank #3 (Hold) mortgage insurer’s performance.
Also, declining loss and claims should continue to strengthen the company’s balance sheet and improve its financial profile.
Shares of MGIC Investment have rallied 24.9% year to date outperforming the industry’s increase of 7.3%. Improving housing market, solid insurance in force and fall in delinquency should help the stock retain the momentum.
Stocks to Consider
Some better-ranked stocks in the multiline industry include Assurant AIZ, MetLife MET and Radian Group RDN, each carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Assurant provides risk management solutions for housing and lifestyle markets in North America, Latin America, Europe and the Asia Pacific. The company delivered positive surprise of 9.86% in the last reported quarter.
MetLife engages in the insurance, annuities, employee benefits, and asset management businesses. The company delivered positive surprise of 5.34% in the last reported quarter.
Radian Group provides mortgage and real estate products and services in the United States. The company delivered positive surprise of 14.29% in the last reported quarter. The stock carries a Zacks Rank #2.
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