MGIC Investment Corporation (NYSE: MTG) and Stewart Information Services Corp (NYSE:STC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitabiliy, risk, earnings, analyst recommendations and institutional ownership.
This table compares MGIC Investment Corporation and Stewart Information Services Corp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|MGIC Investment Corporation||34.99%||17.20%||7.64%|
|Stewart Information Services Corp||4.56%||11.45%||6.67%|
Insider & Institutional Ownership
86.6% of MGIC Investment Corporation shares are owned by institutional investors. Comparatively, 93.6% of Stewart Information Services Corp shares are owned by institutional investors. 1.0% of MGIC Investment Corporation shares are owned by insiders. Comparatively, 2.2% of Stewart Information Services Corp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for MGIC Investment Corporation and Stewart Information Services Corp, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|MGIC Investment Corporation||0||1||8||0||2.89|
|Stewart Information Services Corp||3||1||0||0||1.25|
MGIC Investment Corporation currently has a consensus target price of $11.78, indicating a potential upside of 0.41%. Stewart Information Services Corp has a consensus target price of $41.00, indicating a potential upside of 4.30%. Given Stewart Information Services Corp’s higher probable upside, analysts clearly believe Stewart Information Services Corp is more favorable than MGIC Investment Corporation.
Valuation and Earnings
This table compares MGIC Investment Corporation and Stewart Information Services Corp’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|MGIC Investment Corporation||$1.06 billion||4.10||$798.90 million||$0.97||12.09|
|Stewart Information Services Corp||$2.01 billion||0.46||$137.15 million||$2.79||14.09|
MGIC Investment Corporation has higher revenue, but lower earnings than Stewart Information Services Corp. MGIC Investment Corporation is trading at a lower price-to-earnings ratio than Stewart Information Services Corp, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
MGIC Investment Corporation has a beta of 2.08, suggesting that its stock price is 108% more volatile than the S&P 500. Comparatively, Stewart Information Services Corp has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
Stewart Information Services Corp pays an annual dividend of $1.20 per share and has a dividend yield of 3.1%. MGIC Investment Corporation does not pay a dividend. Stewart Information Services Corp pays out 43.0% of its earnings in the form of a dividend.
MGIC Investment Corporation beats Stewart Information Services Corp on 9 of the 16 factors compared between the two stocks.
MGIC Investment Corporation Company Profile
MGIC Investment Corporation is a holding company. The Company, through its subsidiaries, provides private mortgage insurance and ancillary services. The Company provides mortgage insurance to lenders throughout the United States and to government-sponsored entities to protect against loss from defaults on low down payment residential mortgage loans. Its principal product is primary mortgage insurance. Primary insurance provides mortgage default protection on individual loans and covers unpaid loan principal, delinquent interest and certain expenses associated with the default and subsequent foreclosure or sale approved by the Company. Through certain other non-insurance subsidiaries, the Company also provides various services for the mortgage finance industry, such as contract underwriting, analysis of loan originations and portfolios, and mortgage lead generation. The Company’s subsidiaries include Mortgage Guaranty Insurance Corporation (MGIC) and MGIC Indemnity Corporation (MIC).
Stewart Information Services Corp Company Profile
Stewart Information Services Corporation is a global real estate services company. The Company is engaged in offering products and services through its direct operations, network of Stewart Trusted Providers and family of companies. The Company operates through two segments: title insurance and ancillary services and corporate. Title insurance and related services (title) segment provides services needed to transfer title to property in a real estate transaction and includes services, such as searching, examining, closing and insuring the condition of the title to the property. The ancillary services and corporate segment provides appraisal and valuation services, document management, recording and call center-related services offered to mortgage lenders and servicers, mortgage brokers and mortgage investors. Its primary international operations are located in Canada, the United Kingdom, Australia and Central Europe.
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