MGIC Investment (NYSE:MTG) & SelectQuote (NYSE:SLQT) Financial Analysis

MGIC Investment (NYSE:MTG) and SelectQuote (NYSE:SLQT) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for MGIC Investment and SelectQuote, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGIC Investment	2	3	0	1	2.00
SelectQuote	1	3	0	1	2.20

MGIC Investment presently has a consensus target price of $26.80, suggesting a potential downside of 5.43%. SelectQuote has a consensus target price of $3.88, suggesting a potential upside of 175.80%. Given SelectQuote’s stronger consensus rating and higher probable upside, analysts clearly believe SelectQuote is more favorable than MGIC Investment.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MGIC Investment	61.96%	14.63%	11.53%
SelectQuote	3.95%	10.41%	2.76%

Volatility and Risk

MGIC Investment has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, SelectQuote has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Institutional and Insider Ownership

95.6% of MGIC Investment shares are owned by institutional investors. Comparatively, 34.6% of SelectQuote shares are owned by institutional investors. 1.4% of MGIC Investment shares are owned by insiders. Comparatively, 13.1% of SelectQuote shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares MGIC Investment and SelectQuote”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGIC Investment	$1.22 billion	5.21	$762.99 million	$3.11	9.11
SelectQuote	$1.53 billion	0.16	$47.58 million	$0.05	28.10

MGIC Investment has higher earnings, but lower revenue than SelectQuote. MGIC Investment is trading at a lower price-to-earnings ratio than SelectQuote, indicating that it is currently the more affordable of the two stocks.

Summary

MGIC Investment beats SelectQuote on 7 of the 13 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 SelectQuote

SelectQuote, Inc. operates a technology-enabled, direct-to-consumer distribution platform that sells a range of insurance products and healthcare services in the United States. The company operates through three segments: Senior; Life; and Auto & Home. It distributes senior health policies, such as medicare advantage, medicare supplement, medicare part D, and other ancillary senior health insurance related products, including prescription drugs, dental, vision, and hearing plans; life insurance products, such as term life, final expense, and other ancillary products, including critical illness, accidental death, and juvenile insurance; homeowners, auto, dwelling fire, and other ancillary insurance products; and non-commercial auto and home property, and casualty policies. The company also provides SelectRx, an accredited patient-centered pharmacy home pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and long-term pharmacy care; and population health that helps members understand the benefits available under their health plans, and contracts with insurance carriers. SelectQuote, Inc. was incorporated in 1999 and is headquartered in Overland Park, Kansas.