MGIC Investment Corporation (MTG): BCG Matrix [Dec-2025 Updated]

You're looking at MGIC Investment Corporation (MTG) in late 2025, and honestly, the picture is one of a well-oiled machine that needs a clear growth path. This isn't a startup; it's a mature leader whose high-quality post-2008 insurance book is delivering a solid 15% Return on Equity, making that $300.8 billion in force a clear Star. Still, while the existing business acts as a reliable Cash Cow, funding buybacks like the remaining $614 million authorization, the Question Marks around new business growth-like the recent $16.5 billion in new insurance written-demand your attention before we decide where to place our next dollar.

Background of MGIC Investment Corporation (MTG)

You're looking at MGIC Investment Corporation (MTG), which you should know is the parent company for Mortgage Guaranty Insurance Corporation (MGIC), the firm that really does the work. MGIC is a premier provider of private mortgage insurance (PMI) across the United States. Essentially, they protect lenders from credit losses when a borrower defaults, which, in turn, helps make those affordable, low-down-payment mortgages a reality for families wanting to buy a home. This function makes MGIC a critical piece of the U.S. residential mortgage finance system.

MGIC has a deep history here; they actually founded the modern private mortgage insurance industry way back in 1957. Their core mission, as they see it, revolves around providing prudent and profitable mortgage insurance solutions that actively create opportunities for homeownership. This focus on facilitating sustainable homeownership, especially for first-time and lower-to-moderate-income borrowers, remains central to their strategy today.

Looking at their performance as of late 2025, the results show a durable business model. For the third quarter of 2025, MGIC Investment Corporation reported a net income of $191.1 million, translating to $0.83 per diluted share. That quarter, they wrote $16.5 billion in New Insurance Written (NIW). As of September 30, 2025, the total primary insurance in force stood at $300.8 billion, covering about 1.1 million mortgages, with an annual persistency rate holding steady at 85.0%.

The market seems to agree with their disciplined approach; S&P actually revised its outlook to positive from stable on October 27, 2025. The company, which carries a market capitalization around $6.34 billion as of early December 2025, continues to manage capital actively. For instance, they declared a quarterly dividend of $0.15 per common share payable in November 2025, and in Q3 2025 alone, they repurchased 7.0 million shares for $187.9 million. Finance: draft the Q4 2025 capital allocation forecast by next Wednesday.

MGIC Investment Corporation (MTG) - BCG Matrix: Stars

The Star quadrant for MGIC Investment Corporation (MTG) is characterized by business units or products that command a high market share within a growing market segment. For MGIC Investment Corporation (MTG), this is strongly represented by the quality and scale of its primary insurance in force (IIF), particularly the book of business originating post-2008, which continues to drive superior returns.

This segment demonstrates strong credit performance, evidenced by significant favorable loss reserve development. For instance, in the second quarter of 2025, reestimation of ultimate losses on prior delinquencies resulted in $54 million of favorable loss reserve development. This strength in underwriting quality supports the high profitability metrics MGIC Investment Corporation (MTG) achieves.

The financial results underscore this leadership position. MGIC Investment Corporation (MTG) recorded an annualized return on equity (ROE) of approximately 15% in Q2 2025, a figure significantly above many industry averages. This performance is directly linked to the scale of its insured portfolio.

The sheer size of the portfolio confirms its market leadership. As of September 30, 2025, the primary insurance in force (IIF) stood at $300.8 billion, covering 1.1 million mortgages. This figure represents continued growth, up from $297.0 billion in IIF at the end of Q2 2025. This large, growing base of high-quality risk is what positions this business line as a Star, requiring continued investment to maintain its market share.

You can see the recent financial momentum in the table below, comparing the third and second quarters of 2025:

The strategy for Stars involves reinvestment to sustain market leadership, which is reflected in MGIC Investment Corporation (MTG)'s actions:

• New insurance written (NIW) in Q3 2025 was $16.5 billion.
• New insurance written (NIW) in Q2 2025 was $16.4 billion.
• Book value per share increased 13% year-over-year as of Q2 2025.
• The company authorized a share repurchase program of up to $750 million in April 2025.

Sustaining this success until market growth slows is the path to converting these Stars into Cash Cows. The current in-force premium yield remained relatively flat at 38.3 basis points for both Q3 and Q2 2025, suggesting stability in the revenue stream from this large asset base.

MGIC Investment Corporation (MTG) - BCG Matrix: Cash Cows

Cash Cows are the market leaders that generate more cash than they consume. For MGIC Investment Corporation (MTG), the core mortgage insurance business fits this profile, demonstrating high market share in a mature industry, which allows for significant capital generation.

The entire existing book of business, which represents the core of this cash flow engine, generated stable, recurring net premiums earned of approximately $241.8 million in Q3 2025. This consistent revenue stream underpins the company's ability to fund shareholder returns and maintain a strong balance sheet. The CEO noted this performance underscores the durability of the business model.

You're looking at a business unit that consistently provides the fuel for corporate activities. This cash flow supports aggressive capital return strategies, which is a hallmark of a mature, cash-rich segment. The company's commitment to this is clear through its actions:

• Over the prior four quarters, share repurchases totaled $786 million.
• Over the prior four quarters, shareholder dividends totaled $132 million.
• Total capital returned to shareholders over the prior four quarters was $918 million.

The focus on returning capital is a key indicator of a Cash Cow strategy-milk the gains passively while maintaining the core. In Q3 2025 alone, share repurchases amounted to $187.9 million, reducing outstanding shares by 7.0 million. The quarterly dividend declared was $0.15 per common share, totaling $34 million for the quarter.

To support this ongoing return, MGIC Investment Corporation has a low-risk capital structure, which is evidenced by recent positive external validation and internal balance sheet management. S&P revised its outlook to positive from stable on October 27, 2025. Furthermore, the company has significantly optimized its capital requirements through reinsurance actions, reducing PMIERS required assets by approximately $2.5 billion, or about 43%. This efficiency frees up more cash for deployment elsewhere.

Here are the key financial metrics demonstrating the strength and maturity of this segment as of the third quarter of 2025:

The company's confidence in its capital position is further demonstrated by the authorization for continued capital deployment. MGIC Investment Corporation approved an additional share repurchase program with authorization to purchase up to $750 million of its common stock through December 31, 2027. This long-term authorization signals management's intent to continue 'milking' the cash flows from this established business line to enhance shareholder value well into the future.

MGIC Investment Corporation (MTG) - BCG Matrix: Dogs

DOGS in the Boston Consulting Group Matrix represent business units or product lines operating in low-growth markets with a low relative market share. For MGIC Investment Corporation (MTG), these are typically legacy exposures or non-core activities that tie up capital without generating significant returns. The strategy here is generally to divest or run-off these segments to free up resources for Stars or Cash Cows.

Run-off policies from pre-2008 vintages represent a classic Dog category. While specific Q3 2025 loss ratios for only the pre-2008 book aren't isolated, historical data shows these older policies drive disproportionate claim activity. For instance, as of the fourth quarter of 2020, insurance written in 2008 and prior represented about 9% of the primary risk in force but accounted for 36% of the new primary delinquency notices received in that quarter. This indicates a higher loss profile relative to their shrinking size within the total Insurance in Force (IIF), which stood at $300.8 billion as of September 30, 2025.

Ancillary services or non-core credit risk management solutions are candidates for this quadrant if their revenue contribution is minimal. The 'Other revenue' line item in Q3 2025 was only $0.38 million, a year-over-year decrease of 39.5% from the prior year's comparable period. This minimal and declining revenue stream suggests these activities are not strategic growth drivers.

Older, less efficient reinsurance structures are being actively managed down. You see this in the transition away from older agreements toward newer, optimized ones. For example, MGIC Investment Corporation amended the terms on its 2022 quota share reinsurance transaction, with the cede rate set to decrease from 30% to 28%, effective December 31, 2025. This reduction in ceded premium on that specific structure is part of optimizing the structure, even if the overall reinsurance program is strong. Conversely, new deals are being put in place, such as an excess of loss reinsurance transaction effective December 1, 2025, providing $250 million of coverage on New Insurance Written (NIW) from 2021.

The run-off speed of any portfolio segment is a key indicator of its Dog status, especially when compared to the overall portfolio health. The annual persistency rate for the third quarter of 2025 was reported at exactly 85.0%.

Any segment exhibiting a persistency rate below this benchmark would signal faster run-off, placing it in the Dog category based on the low-growth/shrinking market share definition:

• Segments with persistency below 85.0% as of Q3 2025.
• Older vintages showing higher delinquency notice contribution relative to their in-force risk percentage.
• Non-core revenue streams contributing less than $0.38 million quarterly.

Here's a quick look at some key Q3 2025 metrics that frame the overall business context against which these potential Dogs operate:

The reinsurance structure changes show active management, but the older structures represent the residual risk that needs to be minimized. The 2022 quota share cede rate is moving from 30% down to 28%. That's a tangible reduction in exposure under that specific agreement.

Finance: review the remaining book value associated with 2008 and prior originations by end of Q4 2025.

MGIC Investment Corporation (MTG) - BCG Matrix: Question Marks

You're looking at the new business generation for MGIC Investment Corporation (MTG), which fits the Question Mark profile: high growth potential markets but currently lagging in market share capture. This segment is characterized by high cash consumption relative to current returns, needing a decisive investment strategy to shift its position.

The Private Mortgage Insurance (PMI) market is assumed to be in a high-growth phase, with the scenario suggesting a Compound Annual Growth Rate (CAGR) of 9.5% projected for 2025. Still, MGIC Investment Corporation (MTG)'s own new business volume suggests a relative struggle to capture this growth.

New Insurance Written (NIW) volume in the third quarter of 2025 was reported at $16.5 billion. This figure is notably lower than the $17.2 billion recorded in the third quarter of 2024, clearly indicating a loss of relative market share in new policy origination during that comparison period. This dynamic is classic for a Question Mark; the market is growing, but the company isn't keeping pace with new volume.

Here's a quick look at the Q3 2025 operational snapshot:

The ability to maintain premium pricing power against competitors in a volatile housing market, especially as mortgage rates ease, remains a key variable for future profitability. Low delinquency rates, such as the 2.3% primary delinquency rate reported in Q1 2025, help profitability, but this doesn't directly translate to market share gains in NIW.

Future organic growth prospects are currently overshadowed by the company's active capital return strategy. MGIC Investment Corporation (MTG) relies heavily on buybacks to enhance Earnings Per Share (EPS) when new policy growth is not robust enough on its own. For instance, between July and October 2025, the company repurchased more than 7.38 million shares for $201.47 million. Focusing just on the third quarter, 7.0 million shares were bought back for $187.9 million, with an additional 2.4 million shares repurchased through October 24, 2025, for $65.7 million.

This heavy investment in share repurchases suggests management is prioritizing shareholder value enhancement over aggressive market share capture in the current environment. The strategy is to support EPS, as seen by the Q3 2025 Adjusted EPS of $0.83 beating estimates, even as revenue was slightly soft. The company did reach a milestone, ending Q3 2025 with over $300 billion of insurance in-force.

The Question Mark category demands a clear path forward, which for MGIC Investment Corporation (MTG) involves:

• Monitoring the impact of evolving mortgage rates on new insurance written.
• Assessing the effect of recent reinsurance transactions on capital efficiency.
• Evaluating the competitive landscape against potential new entrants.