MGIC Investment (NYSE:MTG) Sets New 52-Week High - Still a Buy?

Key Points

• MGIC Investment reached a new 52-week high, trading around $30, while analysts maintained a consensus “Hold” rating with an average price target of $28.25.
• The company exceeded quarterly earnings expectations, reporting $0.76 EPS versus $0.73 expected, though revenue fell 3% year over year to $297.08 million.
• MGIC Investment raised its quarterly dividend from $0.15 to $0.17 per share and authorized a $750 million stock buyback, equivalent to up to 12.4% of outstanding shares.

MGIC Investment Corporation (NYSE:MTG - Get Free Report) hit a new 52-week high on Monday . The stock traded as high as $29.97 and last traded at $30.0090, with a volume of 261680 shares changing hands. The stock had previously closed at $29.65.

Wall Street Analyst Weigh In

MTG has been the topic of several research reports. Barclays lowered their target price on MGIC Investment from $29.00 to $28.00 and set an "equal weight" rating on the stock in a research note on Friday, May 1st. Keefe, Bruyette & Woods lifted their price objective on MGIC Investment from $28.00 to $29.00 and gave the stock a "market perform" rating in a report on Friday, April 10th. Weiss Ratings upgraded shares of MGIC Investment from a "buy (b)" rating to a "buy (b+)" rating in a research report on Tuesday, July 7th. Finally, Royal Bank Of Canada assumed coverage on shares of MGIC Investment in a research report on Friday, May 22nd. They issued a "sector perform" rating and a $28.00 price target on the stock. One investment analyst has rated the stock with a Buy rating and four have given a Hold rating to the company. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and a consensus target price of $28.25.

MGIC Investment Stock Up 1.3%

The company has a current ratio of 1.14, a quick ratio of 1.14 and a debt-to-equity ratio of 0.13. The firm has a market cap of $6.35 billion, a PE ratio of 9.54, a price-to-earnings-growth ratio of 2.04 and a beta of 0.67. The stock has a fifty day simple moving average of $27.01 and a two-hundred day simple moving average of $26.90.

MGIC Investment (NYSE:MTG - Get Free Report) last announced its quarterly earnings results on Wednesday, April 29th. The insurance provider reported $0.76 earnings per share for the quarter, beating the consensus estimate of $0.73 by $0.03. MGIC Investment had a return on equity of 14.01% and a net margin of 59.63%.The firm had revenue of $297.08 million for the quarter, compared to analysts' expectations of $303.12 million. During the same period in the prior year, the business posted $0.75 earnings per share. The company's revenue was down 3.0% on a year-over-year basis. As a group, sell-side analysts expect that MGIC Investment Corporation will post 3.05 EPS for the current fiscal year.

MGIC Investment Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, August 20th. Shareholders of record on Wednesday, August 5th will be paid a $0.17 dividend. The ex-dividend date is Wednesday, August 5th. This represents a $0.68 annualized dividend and a yield of 2.3%. This is a boost from MGIC Investment's previous quarterly dividend of $0.15. MGIC Investment's dividend payout ratio is currently 19.05%.

MGIC Investment declared that its Board of Directors has approved a stock buyback plan on Thursday, April 23rd that permits the company to repurchase $750.00 million in shares. This repurchase authorization permits the insurance provider to repurchase up to 12.4% of its shares through open market purchases. Shares repurchase plans are often an indication that the company's board of directors believes its shares are undervalued.

Insiders Place Their Bets

In other news, EVP Paula C. Maggio sold 20,937 shares of the business's stock in a transaction on Friday, May 29th. The shares were sold at an average price of $25.55, for a total transaction of $534,940.35. Following the completion of the transaction, the executive vice president directly owned 169,620 shares in the company, valued at $4,333,791. The trade was a 10.99% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Salvatore A. Miosi sold 30,000 shares of the stock in a transaction on Monday, June 8th. The stock was sold at an average price of $25.38, for a total value of $761,400.00. Following the completion of the sale, the chief operating officer owned 560,951 shares in the company, valued at $14,236,936.38. This trade represents a 5.08% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.34% of the stock is owned by insiders.

Institutional Trading of MGIC Investment

Large investors have recently modified their holdings of the business. Newbridge Financial Services Group Inc. purchased a new stake in MGIC Investment in the third quarter valued at approximately $28,000. V Square Quantitative Management LLC purchased a new stake in shares of MGIC Investment during the 4th quarter valued at $36,000. SBI Securities Co. Ltd. lifted its holdings in shares of MGIC Investment by 40.3% during the 4th quarter. SBI Securities Co. Ltd. now owns 1,461 shares of the insurance provider's stock worth $43,000 after acquiring an additional 420 shares during the last quarter. Geneos Wealth Management Inc. increased its stake in MGIC Investment by 88.0% in the first quarter. Geneos Wealth Management Inc. now owns 1,745 shares of the insurance provider's stock valued at $43,000 after acquiring an additional 817 shares during the last quarter. Finally, Harbor Investment Advisory LLC increased its stake in MGIC Investment by 613.0% in the second quarter. Harbor Investment Advisory LLC now owns 2,574 shares of the insurance provider's stock valued at $73,000 after acquiring an additional 2,213 shares during the last quarter. Institutional investors own 95.58% of the company's stock.

About MGIC Investment

MGIC Investment Corporation NYSE: MTG is a leading provider of private mortgage insurance in the United States. Established in 1957 as the nation's first private mortgage insurer, MGIC helps lenders manage credit risk and facilitates homeownership by protecting mortgage loans against default. Headquartered in Milwaukee, Wisconsin, the company operates through its principal subsidiary, Mortgage Guaranty Insurance Corporation, and maintains relationships with a broad network of originators and servicers nationwide.

The company's primary business activity involves issuing mortgage insurance policies that enable borrowers to purchase homes with down payments below traditional lending thresholds.

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