NMI (NMIH) vs. MBIA (MBI) Critical Comparison

MBIA (NYSE: MBI) and NMI (NASDAQ:NMIH) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Insider and Institutional Ownership

89.1% of NMI shares are owned by institutional investors. 3.1% of MBIA shares are owned by insiders. Comparatively, 5.7% of NMI shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MBIA and NMI’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MBIA $433.00 million 1.88 -$1.61 billion N/A N/A
NMI $182.74 million 5.88 $22.05 million $0.57 28.77

NMI has lower revenue, but higher earnings than MBIA.

Profitability

This table compares MBIA and NMI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MBIA -380.19% -30.18% -5.15%
NMI 18.96% 10.27% 5.99%

Analyst Recommendations

This is a summary of current ratings and price targets for MBIA and NMI, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MBIA 0 1 2 0 2.67
NMI 0 0 8 0 3.00

MBIA presently has a consensus price target of $14.50, indicating a potential upside of 61.11%. NMI has a consensus price target of $19.88, indicating a potential upside of 21.19%. Given MBIA’s higher probable upside, research analysts clearly believe MBIA is more favorable than NMI.

Volatility & Risk

MBIA has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, NMI has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.

Summary

NMI beats MBIA on 9 of the 12 factors compared between the two stocks.

About MBIA

MBIA Inc. provides financial guarantee insurance services to public finance markets. It operates through U.S. Public Finance Insurance, and International and Structured Finance Insurance segments. The company issues financial guarantees for municipal bonds, including tax-exempt and taxable indebtedness of the U.S. political subdivisions and territories, as well as utilities, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities, and other similar agencies and obligations issued by private entities. It also insures the non-U.S. public finance and global structured finance, including asset-backed obligations; and sovereign-related and sub-sovereign bonds, utilities, and privately issued bonds used for the financing of projects that include toll roads, bridges, airports, public transportation facilities, and other types of infrastructure projects, as well as offers third-party reinsurance services. MBIA Inc. was founded in 1973 and is headquartered in Purchase, New York.

About NMI

NMI Holdings, Inc., through its subsidiaries, provides private mortgage guaranty insurance services in the United States. The company offers mortgage insurance; reinsurance on loans; and outsourced loan review services to mortgage loan originators. It serves national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, Internet-sourced lenders, and other non-bank lenders. The company was founded in 2011 and is headquartered in Emeryville, California.

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