According to Bose George


It’s unlikely the booming mortgage market will keep up the frenetic pace it hit during the pandemic. Investors have already lost enthusiasm for originator­s like Rocket Mortgage and United Wholesale Mortgage, which have both sold off in 2021. But the trillions in home loans made in 2020 present a good opportunit­y for mortgage

insurers, which guarantee lenders in the event a borrower can’t make his payment.

Mortgage insurance is needed for borrowers without the typical 20% down payment. According to Bose George, analyst at Keefe Bruyette & Woods, soaring home prices have benefited companies like MGIC Investment Corporatio­n, which targets borrowers with prime credit

scores. It’s currently trading at a book value of $14 with a 1.68% dividend yield; George says fair value is closer to 1.3 times book, or a 30% gain. “Even if the multiple doesn’t improve, you’ll get a doubledigi­t return just from book-value growth,” he says.

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