Shares of NMI Holdings (NASDAQ: NMIH) have rallied 28.9% year to date, outperforming the industry's increase of 24.6%, the Finance sector's increase of 11.6% and the S&P 500 composite's rise of 17.5%.
An improving mortgage insurance portfolio, higher new insurance written volume, a comprehensive reinsurance program, its solid capital position and effective capital deployment drive this Zacks Rank #2 (Buy) stock.
This mortgage insurer has a decent history of delivering surprises in the last six quarters.
NMIH's return on equity (ROE) for the trailing 12 months is 18.3%, better than the industry average of 8%. This reflects efficiency in utilizing its shareholders' funds. It targets 13% ROE over the medium term.
Also, the return on invested capital in the trailing 12 months was 14.8%, better than the industry average of 6.1%, which reflected the insurer's efficiency in utilizing funds to generate income.
The Zacks Consensus Estimate for NMI Holdings' 2024 and 2025 earnings has moved 4.7% and 2.6% north, respectively, in the past 30 days, reflecting analyst optimism.
Image Source: Zacks Investment Research
Can NMIH Retain the Momentum?
Per the Federal Reserve, the U.S. residential mortgage market is one of the largest in the world, with nearly $13 trillion ...
