Shares in lenders mortgage insurance player Genworth Mortgage Insurance Australia Ltd (ASX: GMA) have been tracking down for the past year, dropping from $3.13 to $2.31 at the time of writing.
It's likely a few things have contributed to Genworth's share price demise in the recent past.
To start with its profits took a huge hit when banks changed their lenders mortgage insurance parameters and capped their loan to valuation ratios so demand for lenders mortgage insurance itself dropped.
Genworth's policy to pay out 50% to 80% of underlying NPAT as dividends also hasn't helped them weather any sector storms, with a reduced, but very tasty, dividend tipped for 2018.
A note out of Macquarie last month saw analysts retain their outperform rating for Genworth, placing a $3.50 price target on the stock which some investors may have seen as a short-term buy opportunity, with Macquarie speculating the market is acting like there is a housing market crisis in terms of how its priced the stock, when there is no such volatility expected in the sector at all – although house prices have been flat.
Peer Mortgage Choice Limited (ASX: MOC) hasn't fared much better over the same period with share prices in the mortgage broking company dropping from $2.28 at this time last year to $1.76 today.
