MGIC Investment (NYSE:MTG – Get Free Report) and Finance of America Companies (NYSE:FOA – Get Free Report) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.
Institutional & Insider Ownership
95.6% of MGIC Investment shares are held by institutional investors. Comparatively, 97.2% of Finance of America Companies shares are held by institutional investors. 1.3% of MGIC Investment shares are held by insiders. Comparatively, 35.4% of Finance of America Companies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Ratings
This is a breakdown of recent ratings and price targets for MGIC Investment and Finance of America Companies, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| MGIC Investment | 0 | 5 | 1 | 2 | 2.62 |
| Finance of America Companies | 2 | 1 | 2 | 0 | 2.00 |
MGIC Investment presently has a consensus target price of $30.80, indicating a potential upside of 11.21%. Finance of America Companies has a consensus target price of $30.50, indicating a potential upside of 181.50%. Given Finance of America Companies’ higher probable upside, analysts plainly believe Finance of America Companies is more favorable than MGIC Investment.
Earnings and Valuation
This table compares MGIC Investment and Finance of America Companies”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| MGIC Investment | $1.20 billion | 4.75 | $738.35 million | $3.20 | 8.65 |
| Finance of America Companies | $497.43 million | 0.38 | $45.24 million | ($3.01) | -3.60 |
MGIC Investment has higher revenue and earnings than Finance of America Companies. Finance of America Companies is trading at a lower price-to-earnings ratio than MGIC Investment, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares MGIC Investment and Finance of America Companies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| MGIC Investment | 59.20% | 13.90% | 10.81% |
| Finance of America Companies | -0.10% | 28.39% | 0.35% |
Risk and Volatility
MGIC Investment has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Finance of America Companies has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.
Summary
MGIC Investment beats Finance of America Companies on 9 of the 15 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 Finance of America Companies
Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.
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