MGIC Q2 Profit Drops on Higher Claims; $750M Buyback Authorized
MTG sits 24% above its 52-week low of $24.69.
Summary
MGIC Investment reported Q2 net income of $182.14 million, down from a year ago as incurred losses rose and net premiums earned declined. The underwriting expense ratio improved to 19.8% from 21.9%, but higher claims drove the profit drop. The company repurchased 6.6 million shares for $176.6 million and authorized a new $750 million buyback, while raising the quarterly dividend to $0.17 per share. This follows a $750 million buyback announced in April, signaling aggressive capital return despite deteriorating underwriting results. The stock trades near its 52-week high at 10x forward earnings, above the median analyst target of $28, leaving little room for disappointment if loss trends persist.
At the time of this announcement, MTG was trading at $30.58 on NYSE in the Finance sector, with a market capitalization of approximately $6.5B. The 52-week trading range was $24.69 to $31.03. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Reuters.