Should Value Investors Buy MGIC Investment (MTG) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
MGIC Investment (MTG) is a stock many investors are watching right now. MTG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 5.92, while its industry has an average P/E of 9.66. Over the past 52 weeks, MTG's Forward P/E has been as high as 8.56 and as low as 5.06, with a median of 6.76.
Investors will also notice that MTG has a PEG ratio of 1.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MTG's industry currently sports an average PEG of 1.22. Within the past year, MTG's PEG has been as high as 1.71 and as low as 1.01, with a median of 1.35.
Investors should also recognize that MTG has a P/B ratio of 0.93. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.15. Over the past 12 months, MTG's P/B has been as high as 1.11 and as low as 0.77, with a median of 0.96.
Finally, we should also recognize that MTG has a P/CF ratio of 5.34. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.29. MTG's P/CF has been as high as 8.60 and as low as 4.82, with a median of 7.01, all within the past year.
If you're looking for another solid Insurance - Multi line value stock, take a look at Radian Group (RDN). RDN is a # 1 (Strong Buy) stock with a Value score of A.
Shares of Radian Group currently holds a Forward P/E ratio of 5.87, and its PEG ratio is 1.17. In comparison, its industry sports average P/E and PEG ratios of 9.66 and 1.22.
RDN's price-to-earnings ratio has been as high as 8.06 and as low as 5.53, with a median of 6.82, while its PEG ratio has been as high as 1.61 and as low as 1.11, with a median of 1.36, all within the past year.
Furthermore, Radian Group holds a P/B ratio of 0.90 and its industry's price-to-book ratio is 2.15. RDN's P/B has been as high as 1.07, as low as 0.76, with a median of 0.95 over the past 12 months.
These are just a handful of the figures considered in MGIC Investment and Radian Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that MTG and RDN is an impressive value stock right now.
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MGIC Investment Corporation (MTG) : Free Stock Analysis Report
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