Operating results for private mortgage insurance companies such as MGIC will continue to improve, Deutsche Bank said.
"We believe MGIC and Radian (RDN) will be able to deliver low- to mid-teens operating return on equity for both 2016 and 2017 (and into the future), as loss ratios and default inventory continue to improve towards a post-crisis normalized run-rate," the firm said.
Additionally, the company has a solid competitive position in the sector, according to Deutsche Bank. However, MGIC's stock could be pressured by investors' concerns about the economy, the firm notes.
MGIC stock closed down by 3.45% to $7.28 on Tuesday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rates this stock as a "hold" with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
You can view the full analysis from the report here: MTG