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$26.20 - $39.21$32.37
Multi-Stage$38.67 - $42.46$40.53
Blended Fair Value$36.45
Current Price$28.37
Upside28.48%
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 Rate8.93%8.93%8.93%
Growth Rate-0.50%0.50%1.50%
Fair Value$26.20$32.37$39.21
Upside / Downside-7.66%14.11%38.23%

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 Rate8.93%8.93%8.93%
Growth Rate-0.50%0.50%1.50%
Year 1 PV (M)220.39222.61224.82
Year 2 PV (M)292.47298.38304.35
Year 3 PV (M)350.42361.09371.97
Year 4 PV (M)396.13412.30428.96
Year 5 PV (M)431.30453.42476.43
PV of Terminal Value (M)7,697.058,091.698,502.36
Equity Value (M)9,387.769,839.4810,308.88
Shares Outstanding (M)242.78242.78242.78
Fair Value$38.67$40.53$42.46
Upside / Downside36.30%42.85%49.67%

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