Private mortgage insurance (PMI) for residential mortgages. $303B insurance in force covering $81B of risk. Primarily GSE-purchased loans. | Financial Services — Mortgage Insurance | AGI Score: 4/10 | Analysis date: 2026-03-13
Sister company to ACT (both mortgage insurers). The standout: 30% share buyback over the measurement period — one of the most aggressive buybacks in the market. 359M shares in 2020 → 235M in 2025. $738M net income, 14.3% ROE, 9.1% ROA. Trading near book value. The buyback machine.
MGIC provides private mortgage insurance (PMI) for residential home loans, primarily for loans purchased by Fannie Mae and Freddie Mac. Revenue comes from insurance premiums on $303B of insurance in force covering $81B of risk. The company insures low down payment mortgages (typically <20% down), covering lender losses from homeowner defaults. MGIC competes with FHA/VA government programs and other private insurers. The business is heavily regulated by state insurance departments and GSE requirements (PMIERs).
| Sector | Financial Services |
| Industry | Insurance - Specialty |
| Employees | 542 |
| ROE | 14.3% |
| ROA | 9.1% |
| Gross Margin | 95.1% |
| Operating Margin | 74.2% |
| Profit Margin | 60.8% |
| 52-Week Range | $21.94 — $29.97 |
| Beta | 0.798 |
| Avg Volume | 2,254,985 |
| Short Ratio | 3.19 |
| EV / EBITDA | 6.1x |
| Analyst Target | $28.41667 (hold) |
| Float Shares | 200M |
| Payout Ratio | 17.8% |
| Item | Value | % of Assets | Notes |
|---|---|---|---|
| ASSETS ($6.6B) | |||
| PP&E (net) | $32M | 0.5% | Physical assets |
| Cash & Equivalents | $369M | 5.6% | |
| Other Assets | $6.2B | 94.0% | Receivables, investments, etc. |
| LIABILITIES | |||
| Long-Term Debt | $643M | 9.7% | |
| Other Liabilities | $849M | 12.8% | |
| EQUITY | |||
| Stockholders' Equity | $5.1B | 77.5% | |
| Tangible Book Value | $5.1B | Equity minus goodwill & intangibles | |
| Tangible Book / Share | $23.95 | vs price $26.04 | |
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|
| Revenue | $1.2B | $1.2B | $1.2B | $1.2B | $1.2B | $1.2B |
| Net Income | $151M | $635M | $865M | $713M | $763M | $738M |
| Total Assets | $7.4B | $7.3B | $6.2B | $6.5B | $6.5B | $6.6B |
| Equity | $4.7B | $4.9B | $4.6B | $5.1B | $5.2B | $5.1B |
| Long-Term Debt | $1.2B | $1.1B | $663M | $643M | — | — |
| Cash | $288M | $285M | $327M | $364M | $229M | $369M |
| OCF | $732M | $696M | $650M | $713M | $725M | $853M |
| PP&E | $47M | $46M | $41M | $39M | $36M | $32M |
| Goodwill | — | — | — | — | — | — |
| Shares (Diluted) | 359M | 351M | 311M | 287M | 264M | 235M |
| Period | Shares (Diluted) | Change |
|---|---|---|
| 2020-12-31 | 359,293,000 | |
| 2021-12-31 | 351,308,000 | -2.2% |
| 2022-12-31 | 311,229,000 | -11.4% |
| 2023-12-31 | 287,155,000 | -7.7% |
| 2024-12-31 | 263,995,000 | -8.1% |
| 2025-12-31 | 235,099,000 | -10.9% |
| Total Change | -34.6% |
Significant buyback activity. Share count declining 35% over the period. This mechanically increases EPS and book value per share even with no underlying growth.
Current EPS: $3.14 | Current Book/Share: $21.90 | Current Price: $26.04
| Scenario | 7yr Future Price | Entry for 10x | vs Current | Assumptions |
|---|---|---|---|---|
| Conservative | $64.59 | $6.46 | +303% below | 8% EPS growth, 12x exit P/E |
| Bull Case | $125.31 | $12.53 | +108% below | 15% EPS growth, 15x exit P/E |
| Buyback Only | $43.77 | $4.38 | +495% | No revenue growth, buybacks continue at current rate, 12x P/E |
| Demand Boost | 2/10 | How much AGI increases demand for this company's products |
| Margin Expansion | 6/10 | How much AGI reduces costs / expands margins |
| Strategic Assets | 5/10 | Unique assets that become more valuable with AGI |
| Disruption Risk | 6/10 | Risk that AGI disrupts the core business model |
| Innovation Risk | 5/10 | Risk of being out-innovated by AGI-native competitors |
| Overall AGI Score | 4/10 | Category: minimal_impact |
Reasoning: MGIC faces mixed AGI effects in a highly regulated industry. Demand boost potential if AGI-driven productivity boom increases homeownership/affordability, but offset by risk that AGI enables better credit models reducing need for MI. Margin expansion through automated underwriting, claims processing, and fraud detection. Strategic assets include regulatory licenses and PMIERs compliance which create barriers to entry. However, disruption risk is real - AGI enables superior credit risk models that could allow GSEs/lenders to reduce MI coverage requirements or self-insure. Innovation risk moderate: blockchain-based property records, peer-to-peer lending, and algorithmic underwriting could disintermediate traditional MI. Heavily exposed to housing market cycles which AGI doesn't fundamentally change. Net slightly positive but vulnerable to structural shifts.
MTG (MGIC Investment) trades at 1.11x book value (1.09x tangible book) with $738M net income on a $5.6B market cap (13.1% earnings yield). ROE of 14.3%. Shares have declined 35% over the measurement period through buybacks.
Verdict: WATCHLIST — Best Buyback Machine. 35% share reduction in 5 years is exceptional. With flat revenue, the buybacks alone drive 7-8% annual EPS growth. $738M net income, 14.3% ROE, similar business to ACT but more aggressive on buybacks. The mortgage insurance duopoly (MTG + ACT + a few others) is durable. Same AGI risks as ACT. The P/TB of 1.08x is fair, not cheap. Best entry on a housing scare that spooks the market. Entry zone: $20-22 (floor based on run-rate earnings + book value support).
Data sources: SEC EDGAR XBRL (CIK 876437), yfinance, 10-K filing, AGI scoring framework. Analysis date: 2026-03-13.