MGIC Investment Corp.
) reported breakeven bottom-line results in the fourth quarter of
2013, beating the Zacks Consensus Estimate of a loss of 2 cents
per share. The results compared favorably with the operating loss
of $1.91 per share reported in the year-ago quarter.
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Total revenue for the fourth quarter came in at $251.9 million,
down 32.2% year over year and also missing the Zacks Consensus
Estimate of $255 million. The year-over-year decline was
primarily due to lower realized gain in the company's investment
Net premiums written for the quarter were $204.1 million down
21.7% year over year.
New insurance written in the fourth quarter was $6.7 billion,
down 4.3% year over year, due primarily to a decrease in
Persistency, or the percentage of insurance remaining in force
since a year, was 79.5% percent as on Dec 31, 2013, down 30 basis
points year over year.
MGIC Investment incurred losses of $196.1 million in the quarter,
down 72% year over year driven by fewer new delinquency notices
received, with a lower claim rate and favorable development in
Total loss and expense declined 67% year over year to $252.1
million led primarily by lower incurred losses.
For the full year MGIC Investment reported a loss of 16 cents per
share, substantially down from a loss of $4.59 per share incurred
a year ago.
Total revenue came in at $1.04 billion down 25% year over year
primarily due to lower realized gains. Reported revenue lagged
the Zacks Consensus Estimate of $1.07 billion.
MGIC Investment's fourth-quarter market share increased to a
range of 17% to 18% from the 16.5% to 17% range reported in the
In 2013, MGIC Investment made substantial progress on numerous
issues that have been challenging the company for the last few
years, such as improving capital position, increasing the volume
and quality of new business writings and decreasing the level of
delinquencies and claim payments.
Given improving operating conditions for mortgage insurers, we
expect to see favorable results from other players in the
Genworth Financial Inc.
), both of which are scheduled to release fourth-quarter and full
year 2013 earnings in the first week of Feb 2014.
While MGIC Investment carries a Zacks Rank #2 (Buy), another
CNO Financial Group, Inc.
) with a Zacks Rank #1 (Strong Buy) is also worth