MGIC Investment (MTG) Financials

MGIC Investment Corp (NYSE:MTG) has demonstrated relatively stable and strong financial performance over the last four years, with consistent profitability and steady business operations. Here is a summary of the key financial trends and observations based on quarterly data from Q3 2022 through Q1 2025:

• Consistently Positive Net Income: MGIC reported positive net income in every quarter, with Q1 2025 net income continuing strong at $185.5 million, consistent with prior quarters where net income often ranged between $150 million to $250 million.
• Premiums Earned and Non-Interest Income Stability: Premiums earned remained robust, around $240 million per quarter recently, with total non-interest income slightly increasing over time, reaching $305 million in Q1 2025. This indicates steady demand and business growth in insurance-related earnings.
• Strong Operating Cash Flow: Net cash from operating activities has consistently been strong and positive across quarters, contributing healthy cash inflows (e.g., $223.7 million in Q1 2025). This implies effective earnings quality and working capital management.
• Investment Activity Supporting Operations: Sales and maturities of investments often outpace purchases, with positive net cash from investing activities in some quarters (e.g., $32.4 million in Q1 2025), suggesting prudent investment portfolio management.
• Substantial Equity Base: Total common equity has grown gradually to approximately $5.14 billion by Q1 2025, providing a strong capital buffer to absorb underwriting risks and support growth.
• Stable Long-Term Debt and Interest Expense: Long-term debt remains consistent in the $640-$660 million range, with related interest expense steady around $8.9 million quarterly, indicating no significant change in leverage or financing costs.
• Dividends and Share Repurchases: MGIC continues to return capital to shareholders via dividends (around $0.13 per share recently) and share repurchases, though the scale varies quarter to quarter. This reflects disciplined capital allocation but also implies ongoing use of cash resources for financing activities.
• Amortization and Acquisition Costs: Insurance policy acquisition costs and amortization expenses fluctuate modestly but represent a substantial portion of non-interest expenses, typically around $50-$60 million and $1.6-$3.5 million respectively, consistent with industry practice.
• Negative Net Interest Expense: The company has negligible interest income but incurs steady interest expense related to long-term debt, leading to a net interest expense of about $9 million quarterly. While stable, this is a consistent drag on earnings.
• Increasing Claims and Claim Expenses: Property & liability insurance claims have shown a rising trend, from negative values early in 2024 (indicating claim recoveries) to higher expense figures in recent quarters (close to $9.6 million in Q1 2025), which could pressure underwriting margins.

Summary: MGIC’s financials reflect a solid and stable insurance business with reliable profitability and cash flow generation. The company maintains a strong equity base and responsible capital return policies. The main challenges include managing claims expense trends and the steady burden of interest on debt. For investors, MGIC appears well-positioned with consistent earnings growth, stable revenue streams, and effective cash management over the last several years.