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what it is
MGIC insures low-down-payment mortgages, so lenders get paid first when borrowers default.
how it gets paid
Last year Mgic Investment made $1.2B in revenue. Borrower-paid mortgage insurance was the main engine at $1.02B, or 85% of sales.
why it's growing
Revenue grew 0.5% last year. The quarter missed consensus by 10.7%. Still, 2025 EPS rose from $2.90 to $3.20, helped by a 10.6% drop in diluted shares and a lower effective tax rate.
what just happened
MGIC printed $0.75 in quarterly EPS versus a $0.84 estimate, but full-year 2025 EPS still reached $3.20.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
75/100 earnings predictability — reasonably predictable
8.3x trailing p/e — the market's not buying it — or you found a deal
2.4% dividend yield — cash in your pocket every quarter
13.1% return on capital — nothing to write home about
xvary composite: 69/100 — average
What they do
MGIC insures low-down-payment mortgages, so lenders get paid first when borrowers default.
This business wins because lenders want protection on risky loans, and MGIC is already sitting there. It is the leading private mortgage insurer, with about 19.4% market share in 2025 from web-sourced industry data. Mortgage insurance → a fee to cover default losses → so what: when your borrower misses payments, the lender still gets a check.
How they make money
$1.2B
annual revenue · their business grew +0.5% last year
Borrower-paid mortgage insurance
$1.02B
Lender-paid mortgage insurance
$0.09B
Contract underwriting services
$0.05B
Claims administration services
$0.03B
Training and mortgage tools
$0.01B
The products that matter
insures lenders against defaults
Private Mortgage Insurance
$1.2B revenue · entire business
it's the whole company at ~$1.2B revenue; FY revenue growth here is ~flat (~+0.5%)—ignore a stray “32.6% growth” tag if it was EPS or another line mislabeled as revenue.
100% of revenue
Key numbers
8.3x
trailing p/e
P/E → stock price divided by past earnings → so what: you are paying $8.30 for each $1 of trailing profit.
$3.50
2026 eps est
EPS estimate → next year's profit per share → so what: that puts the stock at about 7.5x forward earnings at $26.41.
16%
return on equity
Return on equity → profit on shareholder money → so what: MGIC is still producing solid insurer-level returns.
2.4%
dividend yield
Dividend yield → cash paid to shareholders each year → so what: you get paid while waiting for the valuation gap to close.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 80 / 100
- long-term debt $646M (10% of capital)
- return on equity 16% — $0.16 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in MTG 3 years ago → it's now worth $21,380.
The index would have given you $14,770.
source: institutional data · total return
What just happened
missed estimates
MGIC printed $0.75 in quarterly EPS versus a $0.84 estimate, but full-year 2025 EPS still reached $3.20.
The quarter missed consensus by 10.7%. Still, 2025 EPS rose from $2.90 to $3.20, helped by a 10.6% drop in diluted shares and a lower effective tax rate.
$0.75
q4 eps
10.7%
vs estimate
$3.20
fy2025 eps
the number that mattered
The number that mattered was the 10.6% share-count drop, because fewer shares turned steady profit into faster EPS growth.
-
mgic investment corp.'s earnings per share probably grew at a healthy rate in 2025.
-
during the first nine months, that number advanced 9.6%, to $2.39, compared to the $2.18 figure that was posted for the prior-year period.
-
that can be traced partially to a 10.6% decline in the number of diluted shares outstanding.
-
a reduced effective income tax rate also helped somewhat.
-
but it should be mentioned that net income was modestly lower, as higher revenues were offset by an increase in total expenses.
source: company earnings report, 2026
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What could go wrong
the core risk is specific: MTG needs housing activity healthy enough to write new insurance and borrower performance calm enough to avoid ugly claims at the same time.
med
housing and origination weakness
MTG lives off the mortgage market. fewer home loans means less demand for private mortgage insurance. this is not background noise. it is the front door to new business.
revenue exposure: effectively 100% of the $1.2B business because private mortgage insurance is the whole company.
med
credit losses and claims severity
mortgage insurance looks calm until borrowers stop paying. if defaults rise, claims follow. the story shifts fast from underwriting discipline to loss control.
earnings sensitivity: the recent $0.83 quarterly EPS shows what is being protected. if claims rise, that profit cushion shrinks first.
med
regulatory and capital rule changes
private mortgage insurance is a regulated corner of finance. tighter capital rules can squeeze flexibility even if mortgage demand stays intact.
balance-sheet angle: B++ balance sheet grade helps, but a business trading at 8.3x earnings does not get much room for policy surprises.
med
single-product concentration
some companies miss in one division and make it up somewhere else. MTG does not have that option. one product produced all $1.2B of revenue.
portfolio implication: if the mortgage cycle turns, there is no second business line to soften the blow.
a downturn here does not dent one segment. it hits the whole revenue base.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next report in february
you want to see whether quarterly EPS stays near the recent $0.83 level and whether revenue holds around the latest $305M run rate.
valuation
does 8.3x stay too cheap to ignore
a single-digit earnings multiple is either an opportunity or a warning label. if results stay steady, that gap gets harder for the market to defend.
risk
housing demand and borrower stress
mortgage volume and defaults are the two moving parts under the whole story. one drives new business. the other drives claims.
flow
institutional buying trend
three straight quarters of net buying is constructive. if that reverses while fundamentals soften, you should care quickly.
Analyst rankings
short-term outlook
top 20%
momentum score 2. in human-speak, analysts think MTG has better near-term performance odds than most stocks.
risk profile
average
stability score 3 — middle-of-the-pack risk. not a bunker stock, not a chaos machine.
chart momentum
top 20%
technical score 2 — the tape has been friendlier than the valuation would suggest.
earnings predictability
75 / 100
results are reasonably dependable. you usually do not get wild surprises here.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 244 buyers vs. 205 sellers in 3q2025. total institutional holdings: 0.2B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$22
$39
$26
current price
$31
target midpoint · +17% from current · 3-5yr high: $35 (+35% · 10% ann'l return)
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