MGIC Investment (NYSE:MTG) & Heritage Global (NASDAQ:HGBL) Critical Survey

MGIC Investment (NYSE:MTG) and Heritage Global (NASDAQ:HGBL) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Valuation & Earnings

This table compares MGIC Investment and Heritage Global”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGIC Investment	$1.21 billion	4.69	$738.35 million	$3.22	8.89
Heritage Global	$48.20 million	0.89	$3.59 million	($0.40)	-3.11

MGIC Investment has higher revenue and earnings than Heritage Global. Heritage Global is trading at a lower price-to-earnings ratio than MGIC Investment, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for MGIC Investment and Heritage Global, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGIC Investment	0	6	1	1	2.38
Heritage Global	1	0	1	0	2.00

MGIC Investment presently has a consensus target price of $31.00, indicating a potential upside of 8.35%. Heritage Global has a consensus target price of $3.00, indicating a potential upside of 140.96%. Given Heritage Global’s higher probable upside, analysts plainly believe Heritage Global is more favorable than MGIC Investment.

Risk & Volatility

MGIC Investment has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Heritage Global has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Institutional and Insider Ownership

95.6% of MGIC Investment shares are held by institutional investors. Comparatively, 33.5% of Heritage Global shares are held by institutional investors. 1.3% of MGIC Investment shares are held by insiders. Comparatively, 15.6% of Heritage Global shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares MGIC Investment and Heritage Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGIC Investment	58.12%	13.81%	10.66%
Heritage Global	-26.89%	6.95%	5.32%

Summary

MGIC Investment beats Heritage Global on 12 of the 14 factors compared between the two stocks.

About MGIC Investment

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, the District of Columbia, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides pool insurance for secondary market mortgage transactions; and contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

About Heritage Global

Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company operates in three segments: Auction and Liquidation, Refurbishment & Resale, and Brokerage. It provides a suite of market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. The company focuses on identifying, valuing, acquiring, and monetizing underlying tangible assets. It acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; and charged-off receivable portfolios. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was founded in 1937 and is headquartered in San Diego, California.