Genworth MI Canada Inc. (MIC.TO) Buy, Sell or…

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Daily Stock Opinions and Ratings

Genworth MI Canada Inc. (MIC.TO)

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43.48

-0.02 (0.05%)

as of Apr 5, 2021, 8:00:00 pm Market Open.

65 watching

COMMENT

Luke warm. Under performing. Dividend: 5.8%. Doesn’t own it in his income portfolio.

BUY

CMHC’s only competitor when it comes to providing mortgage insurance for residential housing. A number of US hedge funds are trying to find ways to short the Canadian housing market and hit upon this company. At these levels it looks very attractive. Curtailment of any type of lending to residential housing market would put pressure on this company. He doesn't think there is anything that will be scrolling Canadian housing for the next few years.

BUY

Mortgage insurance. They and CMHC control about 98%. Excellent management. Went public in July of 2009 and now trading below the original price. Good management. 3 dividend increases. Should earn between $3.10 and $3.15 this year. US parent owns 57%. Market felt the parent would sell their stake and people are waiting for the opportunity.

TOP PICK

Mortgage insurance. The average mortgage they insure is smaller than the national average. 6.3% yield.

HOLD

Insures mortgages. If there were a bust in Canada and foreclosure rates spiked, this would be in trouble. This is why the sentiment is somewhat against the company. Good yield and payout ratio is quite reasonable giving it a margin of safety.

BUY

Did every thing you would have wanted. Several dividend increases. Book more than $24. Main concern is that real estate market is vulnerable to what Americans went through but he doesn’t agree. The US part of company was almost belly up a year or two. On the positive side, they have an Australian side that could be taken public to raise more money.

PAST TOP PICK

(A Top Pick Feb 18/11. Down 12.27%. (See commentary at beginning.)) Still like this one a lot. Did a special dividend and increased their dividend. Trading a good $5 below BV.

TOP PICK

(A Top Pick Dec 17/10. Down 18.95%.) A mortgage insurer. Has 30% of the market with CHMC having the other 70%. Very defensive way to play Canadian housing. Just raised their dividend another 17% and paid out a $0.50 special dividend.

DON'T BUY

There is a perception that they are not setting enough aside for insurance. It is hard to prove an insurance company is under funded.

BUY

5.68% bond maturing June 15/20? The only mortgage insurer outside of the government of Canada. Would definitely recommend this for a conservative investor. Looks pretty attractive.

DON'T BUY

Basically provides insurance on mortgages. Home affordability is poor, particularly in certain regions, which is dangerous for this company. A lot of people are being squeezed and if interest rates go up, there could be a big drop in home prices.

DON'T BUY

Represents insurance against people that can't pay their mortgages. Feels it is a good company but is worried about what the naysayers say about it. He doesn't want to be on a stock where there is all this worry. Would prefer Home Capital (HCG-T) or if you want a pure dividend play, MCAN (MKP-T) would be the way to go.

BUY

Mortgage insurance. Extraordinarily cheap. 4.75% dividend. Genworth (GNW-N) out of the US controls 57% of the company. Trades at 10X earnings, well below book. Investors are concerned that the problems in the US will infect the Canadian operations. He has a lot of faith in management.

COMMENT

Appears cheap. Their problem is twofold. 1) There is a belief that some kind of corporate action is coming that will unlock some value and take the stock higher. 2) There is a perception that they have under provided for mortgages that they are ensuring. He doesn't want to pay the price of admission to see if this is correct.

PAST TOP PICK

(A Top Pick Aug 13/10. Down 10%.) Currently trading at Book. Increase or dividend twice. Over capitalized. Still likes.

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Genworth MI Canada Inc. (MIC.TO)