Head-To-Head Review: The PMI Group (OTCMKTS:PPMIQ) & MGIC Investment (NYSE:MTG)

MGIC Investment (NYSE:MTG) and The PMI Group (OTCMKTS:PPMIQ) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings for MGIC Investment and The PMI Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGIC Investment	0	3	3	0	2.50
The PMI Group	0	0	0	0	0.00

MGIC Investment presently has a consensus target price of $25.50, suggesting a potential upside of 0.00%.

Valuation and Earnings

This table compares MGIC Investment and The PMI Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGIC Investment	$1.16 billion	5.59	$712.95 million	$2.84	8.98
The PMI Group	N/A	N/A	N/A	N/A	N/A

MGIC Investment has higher revenue and earnings than The PMI Group.

Profitability

This table compares MGIC Investment and The PMI Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGIC Investment	64.09%	14.99%	11.75%
The PMI Group	N/A	N/A	N/A

Insider & Institutional Ownership

95.6% of MGIC Investment shares are owned by institutional investors. 1.1% of MGIC Investment shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

MGIC Investment beats The PMI Group on 8 of the 8 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 The PMI Group

The PMI Group, Inc. (TPG) through its subsidiary PMI Mortgage Insurance Co. (MIC), and its affiliated companies (collectively PMI), provides residential mortgage insurance in the United States. During the year ended December 31, 2009, the Company operated in three business segments: United States Mortgage Insurance Operations, International Operations and Corporate and Other. As a United States residential mortgage insurer, PMI offers a variety of mortgage insurance products to meet the capital and credit risk mitigation needs of its customers. In November 2011, the Company announced that it has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.