NMI Holdings Inc.’s NMIH new business production, growth in the capital and reinsurance markets, improved total mortgage origination volume and flexible liquidity make it worth retaining in one’s portfolio.

Growth Projections

The Zacks Consensus Estimate for NMI Holdings’ 2024 earnings is pegged at $4.04 per share, indicating a 5.2% increase from the year-ago reported figure on 7.6% higher revenues of $623.27 million.

Northward Estimate Revision

The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 0.4% and 1.1% north, respectively, in the past 30 days, reflecting analysts’ optimism on the stock.

Earnings Surprise History

NMI Holdings has a decent earnings surprise history. It beat estimates in each of the last four quarters, the average being 6.06%.

Return on Equity (ROE)

NMI Holdings’ ROE for the trailing 12 months is 17.9%, which is better than the industry average of 7.3%. This reflects its efficiency in utilizing shareholders’ funds.

Zacks Rank

NMI Holdings currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 24% compared with the industry’s growth of 25.6%.

Image Source: Zacks Investment Research

Business Tailwinds

This property and casualty insurer continues to benefit from business production, robust growth in high-quality and short portfolios, and continued success in the capital and reinsurance markets.

New insurance written (NIW) — the primary driver of insurance-in-force (IIF) of National MI — is expected to improve by virtue of the resiliency and stability of the housing market, growth in total mortgage origination volume, and increasing size of the U.S. mortgage insurance market. Also, the continued expansion of customer franchise, and growth in monthly and single-premium policy production tied to the rise in customer franchise and market presence are expected to drive NIW of NMIH.

NMI Holdings expects persistency to continue improving and driving further increases in the embedded portfolio value for the year. NMIH remains well-poised to gain from a rise in IIF, increased policy pricing and higher single-premium policy cancellations, which continue to contribute to net premiums earned, one of the major determinants of revenue growth.

Net investment income is expected to improve as the company will roll over more maturities at favorable and higher rates.

NMI Holdings boasts a strong capital position, and had total PMIERs available assets of $2.7 billion and net risk-based required assets of $1.5 billion at the fourth-quarter end. During the year ended Dec 31, 2023, NMIH repurchased 3.5 million shares for $92.3 million. Currently, the insurer has $176.9 million remaining under authorization.