The Canadian Mortgage and Housing Corp. (CMHC) said in early March that it hopes to see every Canadian with an affordable home by 2030. Political parties of all stripes have assured Canadians of their intention to improve housing affordability going forward, but progress has been slow on the ground.
There is a renewed push to extend the maximum amortization period to 30 years, which would move the needle for many prospective buyers. This has been touted by the Home Builders’ Association, which has met with the Prime Minister’s office over the past several months. Genworth MI Canada (TSX:MIC) has also been an outspoken proponent of the regulatory shift.
Genworth is the largest private residential mortgage insurer in Canada. Its stock has climbed 9% in 2019 as of close on March 12.
With pressure mounting to stem the tide of declining volumes, Genworth is well-positioned to benefit from policy shifts designed to reverse the trend. For the full year in 2018 transactional premiums written rose 3% year-over-year to $619 million. However, total premiums written fell 4% to $639 million.
Genworth raised its dividend to $0.51 per share in Q4 2018. This represents a 4.4% yield. The company has achieved dividend-growth for 10 consecutive years.
Genworth stock has weathered major turbulence in the Canadian housing sector, and it looks like looser policy may be on the way with so many buyers frozen out of the market after new regulations. This should push up volumes in the coming years.
