Fundamentals snapshot
MTG · NYQ · Financial Services · Insurance - Specialty
Current price
$29.41
52-week range
$24.69 - $31.89
Market cap
$6.03B
One-glance verdict
We don't put a cash-flow fair value on banks and insurers. For these companies the reported 'cash flow' is really just money moving between loans, deposits and trades — not the leftover profit the owners could actually pocket — so the usual method would print a misleading number.
Balance sheet
Net debt $439.60M. Interest coverage shows how many times profit covers the interest bill.
What stands out
What this company does
MGIC Investment sells a special type of insurance to banks that helps people buy homes with a smaller down payment. The company makes money by collecting regular insurance payments (known as premiums) from lenders for this protection. This service is important because it protects the lender if the homebuyer can't make their mortgage payments, making it less risky for banks to approve loans for more people.
MGIC Investment Corporation was started in 1957 by a lawyer named Max Karl who saw how difficult it was for people to buy a home without a large down payment. He created a new product called private mortgage insurance (PMI) to help people get a mortgage with less money upfront. The company grew and even survived a major housing crisis from 2008 to 2013 by continuing to provide this insurance. After a few ownership changes, including being bought and then sold by another company, MGIC became a publicly traded company in 1991, meaning people can now buy shares of it on the stock market.
MGIC helps people buy homes sooner by offering private mortgage insurance, often called PMI. Normally, if you want to buy a house but don't have a 20% down payment, a bank sees this as a bigger risk. MGIC steps in and sells an insurance policy to the bank that protects the bank if the homebuyer can't make their mortgage payments. This makes the bank more willing to lend the money, allowing people to purchase a home with a smaller down payment, sometimes as low as 3%.
This is the company's main and largest business. When a person gets a home loan from a lender like a bank or credit union but has a small down payment, the lender will often require them to have mortgage insurance. MGIC provides this insurance, and the homebuyer pays the insurance premium (the cost of the policy), which makes up the vast majority of MGIC's revenue (the money it brings in). This insurance protects the lender in case the borrower stops paying their mortgage.
Besides the money it makes from insurance payments, MGIC also earns money from its investments. The company takes the large pool of money it holds (from insurance premiums and its own capital) and invests it, mostly in very safe things like high-quality bonds. The earnings from these investments provide a secondary stream of income for the company. This helps the company maintain a strong financial position to pay out any insurance claims.
The company is focused on using technology to make its insurance process faster and easier for the lenders it works with. They are also concentrating on carefully managing their risk by using data to make smart decisions about which loans to insure, rather than just trying to insure as many loans as possible. Another key strategy is managing their capital (the money they have on hand) wisely, which includes buying back their own stock and sometimes using reinsurance (insurance for insurance companies) to protect themselves from large losses.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
For a bank or insurer, the "free cash flow" shown on its statements is mostly money flowing through loans, deposits and trades — not the leftover profit the owners could actually keep, which is what this kind of valuation needs. Running that through the usual method would spit out a meaningless number, so we leave the cash-flow fair value out here rather than show you something misleading.
Is it drowning in debt?
Net debt $439.6M. Interest coverage 27.1x.
MGIC Investment Corporation's profit covers its interest bill about 27.1 times over. which is stronger than most peers shown here.
Total debt $646.87M Interest coverage 27.08x This is the baseline the peer rows are being compared against.
Total debt $495.97M Interest coverage 26.14x -3% vs MTG Has roughly the same debt cushion as MTG.
Total debt $745.23M Interest coverage 18.19x -33% vs MTG Carries about 1.5x less debt cushion than MTG.
Total debt $426.15M Interest coverage 18.55x -31% vs MTG Carries about 1.5x less debt cushion than MTG.
Total debt $4.29B Interest coverage 34.64x +28% vs MTG Carries about 1.3x more debt cushion than MTG.
What you should know
The numbers
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Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know