Yahoo Finance NMI Holdings (NMIH) Up 37.1% in a Year: More Room to Run?
Shares of NMI Holdings Inc. NMIH have gained 37.1% in a year, outperforming the industry's growth of 3.6%. The Zacks S&P 500 composite has increased 4.2% in the said time frame. With a market capitalization of $2.2 billion, the average volume of shares traded in the last three months was 0.3 million.
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The rally was largely driven by continued growth of higher single premium policy cancellations, improvement in the capital and reinsurance markets and financial flexibility.
NMI Holdings has a solid track record of beating earnings estimates in each of the last four quarters, the average being 5.95%.
This Zacks Rank #3 (hold) insurer has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.5% and 0.7% north, respectively, in the past 30 days, reflecting analysts’ optimism on the stock.
Will the Bull Run Continue?
NMI Holdings’ return on equity for the trailing 12 months is 18.7%, better than the industry average of 6.8%. The metric expanded 220 basis points (bps) year over year. In the first quarter of 2023, annualized return on equity was 17.9%, which expanded 40 bps 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, the primary driver of insurance-in-force (IIF) of National MI is expected to improve.
NMIH continues to benefit from growth in monthly and single premium policy production tied to the increased penetration of existing customer accounts and new customer account activations as well as improvement in the size of the total mortgage insurance market.
The insurer 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 owing to an increase in the book yield of the investment portfolio tied to the deployment of new cash flows and reinvestment of rolling maturities at incrementally higher rates. Growth in the size of total invested asset base also contributes to the upside.
NMI Holdings boasts a strong capital position. NMIH aims to generate solid mid-teens returns for its shareholders. The insurer also has an access to $250 million of undrawn revolving credit capacity under the senior secured credit facilities.
Currently, NMIH has $54 million remaining under authorization.
The Zacks Consensus Estimate for NMI Holdings’ 2023 earnings is pegged at $3.58, indicating a 5.6% increase from the year-ago reported figure on 9% higher revenues of $570.52 million.
The consensus estimate for 2024 earnings is $3.92, indicating a 9.4% increase from the year-ago reported figure on 9.1% higher revenues of $622.46 million.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are RLI Corp. RLI, Kinsale Capital Group, Inc. KNSL and Axis Capital Holdings Limited AXS. While RLI Corp. sports a Zacks Rank #1 (Strong Buy), Kinsale Capital and Axis Capital carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.77%. In the past year, KNSL has gained 53.1%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $10.37 and $12.41, indicating a year-over-year increase of 32.9% and 19.6%, respectively.
RLI Corp.’s earnings surpassed estimates in each of the last trailing four quarters, the average earnings surprise being 43.50%. In the past year, RLI Corp. has gained 10.5%.
The Zacks Consensus Estimate for RLI’s 2023 and 2024 earnings has moved 2.9% and 0.2% north, respectively, in the past 30 days.
Axis Capital beat estimates in three of the last trailing four quarters and missed in one, the average being 6.50%. The Zacks Consensus Estimate for 2023 has moved 2.7% north in the past 30 days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.74 and $8.60, indicating a year-over-year increase of 33.2% and 11.1%, respectively. In the past year, AXS has lost 6.2%.
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RLI Corp. (RLI) : Free Stock Analysis Report
Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
NMI Holdings Inc (NMIH) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
