Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • AUD/USD

    0.6520
    -0.0016 (-0.24%)
     
  • OIL

    82.84
    +1.49 (+1.83%)
     
  • GOLD

    2,239.80
    +27.10 (+1.22%)
     
  • Bitcoin AUD

    108,541.43
    +2,646.31 (+2.50%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6036
    +0.0005 (+0.09%)
     
  • AUD/NZD

    1.0900
    +0.0020 (+0.18%)
     
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NASDAQ

    18,253.05
    -27.79 (-0.15%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,773.84
    +13.76 (+0.03%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     

NMI Holdings (NMIH) Up 13.7% in a Year: Will the Rally Last?

Shares of NMI Holdings Inc. NMIH have gained 13.7% in a year against the industry's decline of 9.3%. The Zacks S&P 500 composite decreased 11.3% in the said time frame. With a market capitalization of $1.86 billion, the average volume of shares traded in the last three months was 0.4 million.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The rally was largely driven by higher single premium policy cancellations, flexible liquidity and effective capital deployment.

This Zacks Rank #3 (Hold) insurer has a decent earnings surprise history. It beat estimates in each of the last four quarters with the average being 6.03%.

Can NMIH Stock Retain the Momentum?

The Zacks Consensus Estimate for NMI Holdings’ 2023 earnings is pegged at $3.62, indicating a 6.78% increase from the year-ago reported figure on 8.7% higher revenues of $569.1 million.

The consensus estimate for 2024 earnings is $3.98, indicating a 9.9% increase from the year-ago reported figure on 10.2% higher revenues of $627.1 million.

NMI Holdings’ return on equity  for the trailing 12 months is 18.8%, better than the industry average of 6.7%. The metric expanded 280 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.

National MI continued to deliver significant new business production, robust growth in high-quality and short portfolios as well as continued success in the capital and reinsurance markets.

By virtue of the broad resiliency of the housing market, growth in total mortgage origination volume and increasing size of the U.S. mortgage insurance market, new insurance written (NIW), the primary driver of insurance-in-force (IIF) of National MI is expected to improve. Also, the continued expansion of customer franchise and growth in monthly and single premium policy production tied to the growth in customer franchise and market presence are expected to drive NIW of NMIH.

NMI Holdings expects persistency to continue to improve and drive further increases in the embedded portfolio value for the remainder of the year.
NMI Holdings remains well poised to gain from the growth of IIF, increased monthly policy production and higher single premium policy cancellations, which continue to contribute to net premiums earned, one of the key drivers of revenue growth.

Net investment income is expected to improve with growth in the size of the total investment portfolio and an increase in book yield.

NMI Holdings boasts a strong capital position. It had total PMIERs available assets of $2.4 billion and net risk-based required assets of $1.2 billion in fourth-quarter 2022 end. NMIH also has an access to $250 million of undrawn revolving credit capacity under the senior secured credit facilities.

National MI remains well poised to continue delivering strong mid-teens returns and compounded book value-per-share growth for shareholders.
NMI Holdings had $68.4 million of repurchase capacity remaining under the program.

Stocks to Consider

Some top-ranked stocks from the property and casualty insurance industry are CNA Financial Corporation CNA, Everest Re Group, Ltd. RE and Selective Insurance Group, Inc. SIGI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CNA Financial beat estimates in two of the last four quarters and missed in the other two, the average being 9.91%. The Zacks Consensus Estimate for 2023 and 2024 has moved 3.9% and 14.3% north, respectively, in the past 60 days.

The Zacks Consensus Estimate for CNA Financial’ 2023 and 2024 earnings per share is pegged at $4.24 and $4.39, indicating a year-over-year increase of 10.4% and 3.5%, respectively. In the past year, CNA has lost 19%.

Everest Re beat estimates in each of the last four quarters, the average being 18.41%.

The Zacks Consensus Estimate for RE’s 2023 and 2024 earnings per share is pegged at $45.63 and $53.02, indicating a year-over-year increase of 68.5% and 16.1%, respectively. In the past year, RE has gained 20.5%.

The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.57 and $7.55, indicating a year-over-year increase of 30.6% and 14.9%, respectively. In the past year, SIGI has gained 7.6%.

The Zacks Consensus Estimate for SIGI’s 2023 and 2024 earnings has moved 9.8% and 9.7% north, respectively, in the past 60 days.

ADVERTISEMENT

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Everest Re Group, Ltd. (RE) : Free Stock Analysis Report

CNA Financial Corporation (CNA) : Free Stock Analysis Report

Selective Insurance Group, Inc. (SIGI) : Free Stock Analysis Report

NMI Holdings Inc (NMIH) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research