Swiss Re (OTCMKTS:SSREY) versus MGIC Investment (NYSE:MTG) Critical Survey

Swiss Re (OTCMKTS:SSREY) 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 dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Volatility and Risk

Swiss Re has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, MGIC Investment has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Insider and 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, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Swiss Re and MGIC Investment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Swiss Re	4	4	0	1	1.78
MGIC Investment	0	4	1	0	2.20

MGIC Investment has a consensus price target of $27.50, indicating a potential upside of 2.63%. Given MGIC Investment’s stronger consensus rating and higher probable upside, analysts plainly believe MGIC Investment is more favorable than Swiss Re.

Dividends

Swiss Re pays an annual dividend of $1.15 per share and has a dividend yield of 2.8%. MGIC Investment pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. MGIC Investment pays out 19.1% of its earnings in the form of a dividend. MGIC Investment has raised its dividend for 6 consecutive years.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Swiss Re	$45.60 billion	1.08	$3.24 billion	N/A	N/A
MGIC Investment	$1.21 billion	4.94	$738.35 million	$3.14	8.53

Swiss Re has higher revenue and earnings than MGIC Investment.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Swiss Re	N/A	N/A	N/A
MGIC Investment	60.84%	14.33%	11.21%

Summary

MGIC Investment beats Swiss Re on 11 of the 16 factors compared between the two stocks.

About Swiss Re

Swiss Re AG, together with its subsidiaries, provides wholesale reinsurance, insurance, other insurance-based forms of risk transfer, and other insurance-related services worldwide. The company operates through three segments: Property & Casualty Reinsurance, Life & Health Reinsurance, and Corporate Solutions. The Property & Casualty Reinsurance segment underwrites property reinsurance, including property, credit and surety, engineering, aviation, marine, agriculture, retakaful, and facultative reinsurance solutions; and casualty reinsurance, such as liability, motor, worker's compensation, personal accident, management and professional liability, cyber, and facultative reinsurance solutions. The Life & Health Reinsurance segment underwrites life and health insurance products. The Corporate Solutions segment offers standard risk transfer covers and multi-line programs to customized solutions. It serves stock and mutual insurance companies, public sector and governmental entities, mid-sized and large corporations, and individuals. The company was founded in 1863 and is headquartered in Zurich, Switzerland.

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.