NYSE$MTG

MGIC Investment Corporation · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

MGIC Investment Corporation reported solid financial results for the fourth quarter, capping a strong year of executing strategies and focusing on long-term success.

MGIC Investment Corporation reported a net income of $177.1 million, or $0.49 per diluted share, for the fourth quarter of 2019, compared to $157.7 million, or $0.43 per diluted share, for the same period in 2018. The company's adjusted net operating income was $176.1 million, or $0.49 per diluted share, compared to $154.0 million, or $0.42 per diluted share in Q4 2018. The company also announced a $300 million share repurchase authorization.

  • New insurance written reached $19.3 billion, up from $12.2 billion in Q4 2018.
  • Insurance in force was $222.3 billion at the end of the year, a 6% increase compared to the previous year.
  • The primary delinquency inventory decreased to 30,028 loans, down from 32,898 loans at the end of 2018.
  • The company's board approved the repurchase of up to an additional $300 million of its common stock through the end of 2021.

Headline financials

Total Revenue

$312M

Previous: $286M+9.1%
EPS (adj)

$0.49

Previous: $0.42+16.7%
Net Premiums Earned

$266M

No prior period
Net Investment Income

$41.3M

No prior period
New Insurance Written (NIW)

$19.3B

Previous: $12.2B+58.2%
Insurance In Force (IIF)

$222B

No prior period
Loss Ratio

8.9%

No prior period
Underwriting Expense Ratio

19.6%

No prior period
Net Premium Yield (bps)

48.4

No prior period
Capital Expenditures

$1.56M

Previous: $3.58M-56.5%
Free Cash Flow

$150M

Previous: $157M-4.8%
Net Income

$177M

Previous: $158M+12.3%
Operating Income

$223M

No prior period
Gross Profit

$1.03B

Previous: $946M+9.0%
Cash & Equivalents

$162M

Previous: $152M+6.6%
Total Assets

$6.23B

Previous: $5.68B+9.7%

Revenue & EPS history

MGIC · Revenue · Quarterly

$312M

Q4 2019+9.1%vs Q4 2018
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Forward guidance

MGIC expects modest insurance in force growth and continued decline in new mortgage delinquency notices and claims paid in 2020.

Tailwinds

  • Ability to provide credit enhancement and low down payment solutions to lenders, GSEs and borrowers.
  • Deliver meaningful returns to shareholders in 2020.
  • Expect insurance in force will grow modestly.
  • Expect the number of new mortgage delinquency notices received will continue to decline in 2020.
  • Expect the amount of claims paid will continue to decline in 2020.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2019

Historical avgQ4 2019

-0.2%

Avg return

Earnings day

+0.9%

Avg return

5 days after

+3.3%

Avg return

30 days after

54%

37 / 68 earnings

Positive

+35.4%

Q4 2012

Best reaction

-65.7%

Q2 2012

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-9.0%-9.9%-13.5%
Q4 2025-5.2%-0.9%-2.8%
Q3 2025+0.8%+2.5%+8.2%
Q1 2025+1.6%+4.4%+6.2%
Q4 2024+1.8%+0.5%-6.0%
Q3 2024+1.2%+3.8%+8.8%
Q2 2024-1.0%-5.5%+2.7%
Q1 2024+1.1%+3.3%+3.6%
Q4 2023-1.2%-4.8%-2.0%
Q3 2023+1.4%+6.3%+5.4%
Q2 2023+5.3%+7.9%+6.0%
Q1 2023-1.4%+1.3%+6.8%
Q4 2022+1.2%-2.4%-1.5%
Q3 2022-1.8%-1.2%-2.5%
Q2 2022+3.5%+3.5%-0.3%
Q1 2022-0.5%-3.8%+1.8%
Q4 2021-0.7%+1.3%-4.7%
Q3 2021-6.8%-4.3%-14.0%
Q2 2021+1.8%+3.8%+10.6%
Q1 2021-8.1%-8.0%-4.5%
Q4 2020+1.7%-3.7%+1.3%
Q3 2020-4.0%+3.7%+16.7%
Q2 2020+1.7%+3.4%+12.1%
Q1 2020+5.9%+0.0%+45.5%
Q4 2019+3.0%+1.1%-9.4%
Q3 2019+2.8%+3.0%+2.5%
Q2 2019+3.2%-3.0%-5.1%
Q1 2019+3.6%+5.3%-0.9%
Q4 2018+2.0%+1.0%+13.6%
Q3 2018-0.9%-2.8%-4.8%
Q2 2018+9.7%+10.7%+11.1%
Q1 2018-3.9%-4.2%-0.7%
Q4 2017+3.2%+4.0%-5.3%
Q3 2017+5.4%+4.5%+9.8%
Q2 2017+0.6%-1.4%-4.4%
Q1 2017-1.6%-0.5%-3.0%
Q4 2016+2.1%+1.0%+4.4%
Q3 2016+6.7%+7.3%+13.7%
Q2 2016+7.2%+8.5%+23.4%
Q1 2016-4.5%
Q4 2015-13.7%
Q3 2015+2.2%
Q2 2015-2.4%
Q1 2015+2.1%
Q4 2014+0.6%
Q3 2014+6.0%
Q2 2014-7.2%
Q1 2014+6.4%
Q4 2013-7.6%
Q3 2013+12.9%
Q2 2013+12.3%
Q1 2013-6.6%
Q4 2012+35.4%
Q3 2012-3.0%
Q2 2012-65.7%
Q1 2012+2.6%
Q4 2011-2.0%
Q3 2011-11.0%
Q2 2011+9.0%
Q1 2010+1.6%
Q1 2011+1.4%
Q4 2008-3.4%
Q4 2010-3.4%
Q3 2010-2.4%
Q3 2009-2.4%
Q4 2009-1.6%
Q2 2010-1.6%
Q2 2009-1.6%

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