Genworth MI Canada (TSX: MIC) posted their third quarter yesterday. Highlights include a declining delinquency rate (down to 0.15%), lower combined ratio (down to 48% for the quarter), etc. The corporation continues to pile up equity on its balance sheet (book value now at $28.91/share without exclusion of intangibles), and they bumped up their quarterly dividend to 32 cents from 29 cents.
Basically the housing market in Canada has not gone into a huge tailspin as reported by the media – companies like Genworth profit incredibly by no cataclysmic events going on in the economy. The other financial proxies for large housing defaults are Home Capital Group (TSX: HCG) and Equitable Group (TSX: ETC) and their equity prices do not show signs of any imminent collapse.
MIC’s results in the fourth quarter will be materially impacted by the recent federal government changes announced to mortgage insurance rules, however. But the investment theory is that even if MIC shut down and ran their book off, they’d still have a value much closer to book value than their current market value today.
Right now, this is all “treat” and no “trick”. Happy Halloween!