MGIC Investment Corp (MTG) has disclosed a new risk, in the Costs category.
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MGIC Investment Corporation faces a significant financial risk due to its reliance on dividends from its insurance subsidiaries to meet its cash requirements at the holding company level. If regulatory restrictions or other factors impede these subsidiaries from paying dividends in sufficient amounts, MGIC’s ability to meet its long-term debt obligations, repurchase shares, or distribute dividends to shareholders could be adversely affected. With long-term debt obligations amounting to $650 million and annual debt service payments of $34 million, any interruption in the expected cash inflow from subsidiaries could strain the company’s financial operations. Additionally, any required capital contributions to its subsidiaries would further deplete MGIC’s cash reserves, exacerbating the financial risk.
The average MTG stock price target is $27.00, implying 13.21% upside potential.
To learn more about MGIC Investment Corp’s risk factors, click here.
