MTG - MGIC Investment Corporation

MGIC Investment Corporation provides private mortgage insurance (PMI) policies that protect mortgage lenders and investors against losses when homeowners default on residential mortgage loans with down payments below 20%. The core customer is B2B: mortgage originators (banks, credit unions, non-bank lenders) and government-sponsored enterprises like Fannie Mae and Freddie Mac, with a transactional-to-recurring premium model tied to outstanding insured loan balances. MGIC generates approximately $1.1B in annual net premiums earned, operating almost exclusively in the U.S. residential mortgage market. The business is deeply cyclical, tied to housing origination volumes and credit performance across the domestic mortgage market.

Past Year Trends

• MGIC Investment grew new insurance written 8% in full-year 2025 to $60 billion, ending the year with $303.1 billion of primary insurance in force covering 1.1 million mortgages. (Bullish)
• FY2025 net income was $738.3 million ($3.14 per diluted share) on revenue of $1.21 billion, a modest 0.49% revenue increase year-over-year, reflecting a largely flat mortgage origination market. (Neutral)
• MGIC returned $915 million in capital to shareholders in 2025 through buybacks and dividends, while Q4 2025 losses surged to $31 million from $9 million in the prior-year quarter, signaling early credit normalization in its insured portfolio. (Bearish)

Next Year Trends

• MGIC authorized a new $750 million share repurchase program in Q1 2026, building on its already aggressive capital return posture and providing direct per-share earnings accretion as the float shrinks. (Bullish)
• MGIC expects its insurance in force and new insurance written volumes to remain roughly flat in 2026, as consensus mortgage origination forecasts show no material recovery while mortgage rates stay elevated, capping premium revenue growth. (Neutral)
• Loss ratios are expected to continue normalizing through 2026, with paid losses having already more than tripled quarter-over-quarter in Q4 2025 ($31M vs $9M), threatening the reserve-release tailwinds that had inflated prior-year net income. (Bearish)

Red Flags

No severe red flags identified as of August 2025.