We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Add MetLife (MET) to Your Portfolio Now
Read MoreHide Full Article
MetLife, Inc. (MET - Free Report) is well-poised for growth on the back of rebounding revenues, robust private equity portfolio, and constant product introductions and acquisitions. Prudent divestitures in sync with the company’s strategy to focus on high growth businesses and a strong financial position are other highlights of the stock.
Zacks Rank & Price Performance
MetLife carries a Zacks Rank #2 (Buy), at present.
The stock has gained 57.8% in a year, outperforming the industry’s and the Finance sector’s rally of 38.8% and 38.2%, respectively. The S&P Index climbed 34.2 % in the same time frame.
Image Source: Zacks Investment Research
Style Score
The company has an impressive Value Score of A, which reflects an attractive valuation of the stock.
Robust Prospect
The Zacks Consensus Estimate for the company’s 2021 earnings indicates an improvement of 29.6% from the prior-year’s reported figure.
Positive Estimate Revision
The Zacks Consensus Estimate for 2021 earnings has moved north by 10.8% in the past 60 days.
Impressive Earnings Surprise History
MetLife beat earnings estimates in each of the trailing four quarters, the average surprise being 33.35%.
Valuation
Price-to-book (P/B) is one of the multiples used for valuing insurance stocks. Compared with the multiline industry’s trailing 12-month P/B ratio of 1.6, MetLife has a reading of 0.8. It is quite evident that the stock is currently undervalued.
Business Tailwinds
After suffering from COVID-19-related business challenges, the company’s revenues have witnessed an uptick in the first half of 2021. The trend is likely to continue in the days ahead owing to robust persistence rates and revival of sales resulting from an improved operating environment.
The investment portfolio of MetLife requires a special mention, which generated solid variable investment income (VII) on the back of increased private equity gains. Robust performance of the company’s investment portfolio is noteworthy as a low interest rate environment continues to prevail throughout the United States. As the equity markets performed well during the April-June period of this year, the private equity portfolio is expected to generate strong returns in third-quarter 2021 as well. It is worth mentioning that private equity returns are reported on a one quarter lag.
The company has been introducing a wide array of products and pursuing buyouts to bolster its capabilities and broaden nationwide presence. Cumulatively, these initiatives reflect MetLife diversification strategy through which the company forays into diverse streams of business. It completed the buyout of Versant Health this year, by virtue of which it emerged as the third largest vision care provider in the United States. The acquisition also contributed to the year-over-year rise in U.S. Group premiums, fees and other revenues of MetLife in the second quarter. This July, the company launched a pet insurance product aimed at extending insurance coverage for pets, addressing the diversified financial needs of pet parents and strengthening its presence across the U.S. pet insurance market.
The company has been undertaking divestitures to focus on high growth businesses and eliminate underperforming ones. By doing so, MetLife intends to generate higher free cash flows with the help of which it can pursue several growth-related initiatives. The company anticipates to remain below its targeted direct expense ratio of 12.3% for 2021 and 2022 as well.
MetLife boasts of a strong liquidity position backed by an increasing cash balance and reducing debt balance. It constantly engages in prudent deployment of capital through share buybacks and dividend hikes. Recently, the company approved a share repurchase program of $3 billion. This year, management approved a 4.3% hike in the quarterly dividend. Its dividend yield of 3.1% compares favorably with the industry’s figure of 2.1%. A trailing 12-month return on equity (ROE) of 10.8%, which remains higher than the industry’s figure of 9.8%, highlights tactical utilization of shareholders’ funds.
American International, Hartford Financial and Old Republic have a trailing four-quarter earnings surprise of 15.09%, 37.53% and 59.51%, on average, respectively.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Add MetLife (MET) to Your Portfolio Now
MetLife, Inc. (MET - Free Report) is well-poised for growth on the back of rebounding revenues, robust private equity portfolio, and constant product introductions and acquisitions. Prudent divestitures in sync with the company’s strategy to focus on high growth businesses and a strong financial position are other highlights of the stock.
Zacks Rank & Price Performance
MetLife carries a Zacks Rank #2 (Buy), at present.
The stock has gained 57.8% in a year, outperforming the industry’s and the Finance sector’s rally of 38.8% and 38.2%, respectively. The S&P Index climbed 34.2 % in the same time frame.
Image Source: Zacks Investment Research
Style Score
The company has an impressive Value Score of A, which reflects an attractive valuation of the stock.
Robust Prospect
The Zacks Consensus Estimate for the company’s 2021 earnings indicates an improvement of 29.6% from the prior-year’s reported figure.
Positive Estimate Revision
The Zacks Consensus Estimate for 2021 earnings has moved north by 10.8% in the past 60 days.
Impressive Earnings Surprise History
MetLife beat earnings estimates in each of the trailing four quarters, the average surprise being 33.35%.
Valuation
Price-to-book (P/B) is one of the multiples used for valuing insurance stocks. Compared with the multiline industry’s trailing 12-month P/B ratio of 1.6, MetLife has a reading of 0.8. It is quite evident that the stock is currently undervalued.
Business Tailwinds
After suffering from COVID-19-related business challenges, the company’s revenues have witnessed an uptick in the first half of 2021. The trend is likely to continue in the days ahead owing to robust persistence rates and revival of sales resulting from an improved operating environment.
The investment portfolio of MetLife requires a special mention, which generated solid variable investment income (VII) on the back of increased private equity gains. Robust performance of the company’s investment portfolio is noteworthy as a low interest rate environment continues to prevail throughout the United States. As the equity markets performed well during the April-June period of this year, the private equity portfolio is expected to generate strong returns in third-quarter 2021 as well. It is worth mentioning that private equity returns are reported on a one quarter lag.
The company has been introducing a wide array of products and pursuing buyouts to bolster its capabilities and broaden nationwide presence. Cumulatively, these initiatives reflect MetLife diversification strategy through which the company forays into diverse streams of business. It completed the buyout of Versant Health this year, by virtue of which it emerged as the third largest vision care provider in the United States. The acquisition also contributed to the year-over-year rise in U.S. Group premiums, fees and other revenues of MetLife in the second quarter. This July, the company launched a pet insurance product aimed at extending insurance coverage for pets, addressing the diversified financial needs of pet parents and strengthening its presence across the U.S. pet insurance market.
The company has been undertaking divestitures to focus on high growth businesses and eliminate underperforming ones. By doing so, MetLife intends to generate higher free cash flows with the help of which it can pursue several growth-related initiatives. The company anticipates to remain below its targeted direct expense ratio of 12.3% for 2021 and 2022 as well.
MetLife boasts of a strong liquidity position backed by an increasing cash balance and reducing debt balance. It constantly engages in prudent deployment of capital through share buybacks and dividend hikes. Recently, the company approved a share repurchase program of $3 billion. This year, management approved a 4.3% hike in the quarterly dividend. Its dividend yield of 3.1% compares favorably with the industry’s figure of 2.1%. A trailing 12-month return on equity (ROE) of 10.8%, which remains higher than the industry’s figure of 9.8%, highlights tactical utilization of shareholders’ funds.
Other Stocks to Consider
Some other top-ranked stocks in the same space include American International Group, Inc. (AIG - Free Report) , The Hartford Financial Services Group, Inc. (HIG - Free Report) and Old Republic International Corporation (ORI - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American International, Hartford Financial and Old Republic have a trailing four-quarter earnings surprise of 15.09%, 37.53% and 59.51%, on average, respectively.