Head-To-Head Analysis: MGIC Investment (NYSE:MTG) vs. The PMI Group (OTCMKTS:PPMIQ)

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

Profitability

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

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

Analyst Recommendations

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

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

MGIC Investment has a consensus price target of $25.50, indicating a potential downside of 3.15%. Given The PMI Group’s higher possible upside, equities analysts clearly believe The PMI Group is more favorable than MGIC Investment.

Insider and Institutional Ownership

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The PMI Group	N/A	N/A	N/A	N/A	N/A
MGIC Investment	$1.19 billion	5.60	$712.95 million	$2.84	9.27

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

Summary

MGIC Investment beats The PMI Group on 8 of the 9 factors compared between the two stocks.

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.

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.