Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

MGIC Investment Corporation (MTG)

Company Dividend Discount ModelIndustry: Insurance - SpecialtySector: Financial Services

Valuation Snapshot

Stable Growth$27.04 - $40.83$33.54
Multi-Stage$40.83 - $44.85$42.80
Blended Fair Value$38.17
Current Price$28.37
Upside34.55%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS25.50%0.00%0.540.510.460.390.340.170.000.000.000.00
YoY Growth--6.13%10.83%17.75%14.82%95.78%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--2.17%2.31%3.41%2.86%2.44%2.72%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)753.74
(-) Cash Dividends Paid (M)132.01
(=) Cash Retained (M)621.72
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)150.7594.2256.53
Cash Retained (M)621.72621.72621.72
(-) Cash Required (M)-150.75-94.22-56.53
(=) Excess Retained (M)470.98527.51565.19
(/) Shares Outstanding (M)242.78242.78242.78
(=) Excess Retained per Share1.942.172.33
LTM Dividend per Share0.540.540.54
(+) Excess Retained per Share1.942.172.33
(=) Adjusted Dividend2.482.722.87
WACC / Discount Rate8.64%8.64%8.64%
Growth Rate-0.50%0.50%1.50%
Fair Value$27.04$33.54$40.83
Upside / Downside-4.69%18.23%43.91%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)753.74757.50761.28765.08768.90772.74795.92
Payout Ratio17.51%32.01%46.51%61.01%75.50%90.00%92.50%
Projected Dividends (M)132.01242.49354.06466.74580.54695.46736.22

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.64%8.64%8.64%
Growth Rate-0.50%0.50%1.50%
Year 1 PV (M)220.99223.21225.43
Year 2 PV (M)294.05299.99305.99
Year 3 PV (M)353.26364.02375.00
Year 4 PV (M)400.43416.77433.61
Year 5 PV (M)437.16459.57482.90
PV of Terminal Value (M)8,207.558,628.379,066.27
Equity Value (M)9,913.4410,391.9310,889.19
Shares Outstanding (M)242.78242.78242.78
Fair Value$40.83$42.80$44.85
Upside / Downside43.93%50.87%58.09%

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