Reviewing MGIC Investment (NYSE:MTG) and Hippo (NYSE:HIPO)

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Hippo and MGIC Investment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hippo	1	1	4	1	2.71
MGIC Investment	1	3	0	1	2.20

Hippo presently has a consensus target price of $37.50, suggesting a potential upside of 24.54%. MGIC Investment has a consensus target price of $27.50, suggesting a potential downside of 5.85%. Given Hippo’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Hippo is more favorable than MGIC Investment.

Insider & Institutional Ownership

43.0% of Hippo shares are held by institutional investors. Comparatively, 95.6% of MGIC Investment shares are held by institutional investors. 10.8% of Hippo shares are held by company insiders. Comparatively, 1.1% of MGIC Investment shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Hippo has a beta of 1.57, meaning that its stock price is 57% more volatile than the S&P 500. Comparatively, MGIC Investment has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hippo	21.30%	-5.89%	-1.28%
MGIC Investment	61.96%	14.62%	11.50%

Valuation & Earnings

This table compares Hippo 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
Hippo	$372.10 million	2.05	-$40.50 million	$3.62	8.32
MGIC Investment	$1.21 billion	5.41	$762.99 million	$3.11	9.39

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

Summary

MGIC Investment beats Hippo on 8 of the 14 factors compared between the two stocks.

About Hippo

Hippo Holdings Inc. provides property and casualty insurance products to individuals and business customers primarily in the United States. The company operates through three segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. Its insurance products include homeowners' insurance against risks of fire, wind, and theft, as well as other personal lines policies from third party carriers; and personal and commercial, as well as home, auto, cyber, small business, life, specialty lines, and other insurance products. The company distributes insurance products and services through its technology platform and website, as well as operates licensed insurance agencies. Hippo Holdings Inc. is headquartered in Palo Alto, California.

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.