Critical Contrast: MGIC Investment (NYSE:MTG) versus International General Insurance (NASDAQ:IGIC)

MGIC Investment (NYSE:MTG) and International General Insurance (NASDAQ:IGIC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Earnings & Valuation

This table compares MGIC Investment and International General Insurance”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGIC Investment	$1.21 billion	4.83	$738.35 million	$3.14	8.69
International General Insurance	$516.90 million	2.27	$127.20 million	$2.87	9.17

MGIC Investment has higher revenue and earnings than International General Insurance. MGIC Investment is trading at a lower price-to-earnings ratio than International General Insurance, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

MGIC Investment has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, International General Insurance has a beta of 0.15, indicating that its stock price is 85% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for MGIC Investment and International General Insurance, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGIC Investment	0	4	1	0	2.20
International General Insurance	0	0	2	0	3.00

MGIC Investment currently has a consensus price target of $28.50, suggesting a potential upside of 4.47%. International General Insurance has a consensus price target of $28.00, suggesting a potential upside of 6.38%. Given International General Insurance’s stronger consensus rating and higher possible upside, analysts clearly believe International General Insurance is more favorable than MGIC Investment.

Profitability

This table compares MGIC Investment and International General Insurance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGIC Investment	60.84%	14.33%	11.21%
International General Insurance	24.61%	16.98%	5.45%

Insider & Institutional Ownership

95.6% of MGIC Investment shares are held by institutional investors. Comparatively, 54.2% of International General Insurance shares are held by institutional investors. 1.3% of MGIC Investment shares are held by insiders. Comparatively, 20.1% of International General Insurance shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

MGIC Investment pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. International General Insurance pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. MGIC Investment pays out 19.1% of its earnings in the form of a dividend. International General Insurance pays out 7.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. MGIC Investment has raised its dividend for 6 consecutive years and International General Insurance has raised its dividend for 2 consecutive years. MGIC Investment is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

MGIC Investment beats International General Insurance on 10 of the 17 factors compared between the two stocks.

About MGIC Investment

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, the District of Columbia, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides pool insurance for secondary market mortgage transactions; and contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

About International General Insurance

International General Insurance Holdings Ltd. engages in the provision of specialty insurance and reinsurance solutions worldwide. The company operates through three segments: Specialty Long-tail, Specialty Short-tail, and Reinsurance. It is involved in underwriting a portfolio of specialty risks, including energy, property, construction and engineering, ports and terminals, general aviation, political violence, professional lines, financial institutions, motor, marine liability, contingency, marine, treaty, and casualty insurance and reinsurance. The company was founded in 2001 and is based in Amman, Jordan.