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Here's Why Investors Should Hold Voya Financial (VOYA) Stock
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Voya Financial, Inc. (VOYA - Free Report) has been gaining momentum, given higher investment income, higher average equity markets, positive net flows and strong financial standing.
Earnings Surprise History
Voya Financial surpassed estimates in thee of the last four reported quarters and missed in one, with the average beat being 19.78%.
Zacks Rank & Price Performance
Voya Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 1% against the industry’s decline of 22.4%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Voya Financial’s trailing 12-month return on equity (ROE) was 9.2%, which expanded 320 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
Business Tailwinds
Voya’s earnings are driven by solid performance across Wealth Solutions, Investment Management and Health Solutions. These businesses are higher-growth, higher-return, capital-light businesses boasting a solid presence.
The Wealth Solutions segment has been witnessing significant growth on the back of favorable alternative and prepayment income, continued strength in underlying business results, higher surplus income as well as lower credited interest, higher investment income, full-service client net flows and favorable equity markets.
In the first quarter, this segment generated positive full-service net flows of $446 million, reflecting strong organic growth as well as lower participant and planned surrenders.
Considering growth across all product lines, continued demand for protection solutions among both employers and employees, strong alternative and prepayment income, growth of the Stop Loss and Voluntary blocks of business as well as higher alternative asset income, the Health Solutions segment of VOYA is likely to benefit in the upcoming quarters.
The Investment Management segment should gain from higher investment capital returns owing to overall market performance and increased fee revenues driven by higher average equity markets and positive net flows.
Voya Financial undertakes strategic steps to ramp up growth at its Investment Management segment. In May 2022, Voya Financial intended to ink a long-term strategic partnership with Allianz Global Investors, where Allianz will transfer its U.S. business (AGI U.S.) to Voya Investment Management. This partnership will enable Voya to acquire highly complementary investment management teams and assets at scale. Following the partnership, Voya Investment Management’s assets under management will increase to about $370 billion.
In January 2022, Investment Management closed the acquisition of the investment advisory business and certain other assets of small-cap growth specialist, Tygh Capital Management. This deal is likely to ensure Voya’s continued investment in its equity capabilities.
Voya Financial’s capital levels remain strong and above targets. As of Mar 31, 2022, the estimated combined risk-based capital (RBC) ratio, with adjustments for certain intercompany transactions, was 453%, above the 375% target.
In the first quarter of 2022, Voya deployed $700 million of excess capital for share repurchases worth $500 million, $200 million of debt extinguishment and $20 million in common stock dividends. Voya expects to deploy about $60 million of additional capital for investment management over the remainder of 2022.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 33.7%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 4.9% and 4.1% north, respectively, in the past 30 days.
The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 30 days. In the past year, HCI Group stock has lost 17.4%.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share indicates year-over-year increases of 280.9% and 75%, respectively.
RLI has a solid track record of beating earnings estimates in each of the last seven quarters. In the past year, RLI stock has increased 9.5%.
The Zacks Consensus Estimate for RLI’s 2022 and 2023 earnings per share is pegged at $4.35 and $4.45, indicating year-over-year increases of 12.4% and 2.3%, respectively.
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Here's Why Investors Should Hold Voya Financial (VOYA) Stock
Voya Financial, Inc. (VOYA - Free Report) has been gaining momentum, given higher investment income, higher average equity markets, positive net flows and strong financial standing.
Earnings Surprise History
Voya Financial surpassed estimates in thee of the last four reported quarters and missed in one, with the average beat being 19.78%.
Zacks Rank & Price Performance
Voya Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 1% against the industry’s decline of 22.4%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Voya Financial’s trailing 12-month return on equity (ROE) was 9.2%, which expanded 320 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
Business Tailwinds
Voya’s earnings are driven by solid performance across Wealth Solutions, Investment Management and Health Solutions. These businesses are higher-growth, higher-return, capital-light businesses boasting a solid presence.
The Wealth Solutions segment has been witnessing significant growth on the back of favorable alternative and prepayment income, continued strength in underlying business results, higher surplus income as well as lower credited interest, higher investment income, full-service client net flows and favorable equity markets.
In the first quarter, this segment generated positive full-service net flows of $446 million, reflecting strong organic growth as well as lower participant and planned surrenders.
Considering growth across all product lines, continued demand for protection solutions among both employers and employees, strong alternative and prepayment income, growth of the Stop Loss and Voluntary blocks of business as well as higher alternative asset income, the Health Solutions segment of VOYA is likely to benefit in the upcoming quarters.
The Investment Management segment should gain from higher investment capital returns owing to overall market performance and increased fee revenues driven by higher average equity markets and positive net flows.
Voya Financial undertakes strategic steps to ramp up growth at its Investment Management segment. In May 2022, Voya Financial intended to ink a long-term strategic partnership with Allianz Global Investors, where Allianz will transfer its U.S. business (AGI U.S.) to Voya Investment Management. This partnership will enable Voya to acquire highly complementary investment management teams and assets at scale. Following the partnership, Voya Investment Management’s assets under management will increase to about $370 billion.
In January 2022, Investment Management closed the acquisition of the investment advisory business and certain other assets of small-cap growth specialist, Tygh Capital Management. This deal is likely to ensure Voya’s continued investment in its equity capabilities.
Voya Financial’s capital levels remain strong and above targets. As of Mar 31, 2022, the estimated combined risk-based capital (RBC) ratio, with adjustments for certain intercompany transactions, was 453%, above the 375% target.
In the first quarter of 2022, Voya deployed $700 million of excess capital for share repurchases worth $500 million, $200 million of debt extinguishment and $20 million in common stock dividends. Voya expects to deploy about $60 million of additional capital for investment management over the remainder of 2022.
Stocks to Consider
Some better-ranked stocks in the insurance industry are W.R. Berkley Corporation (WRB - Free Report) , HCI Group, Inc. (HCI - Free Report) and RLI Corp. (RLI - Free Report) . While W.R. Berkley and HCI Group sport a Zacks Rank #1 (Strong Buy), RLI Corp. carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 33.7%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 4.9% and 4.1% north, respectively, in the past 30 days.
The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 30 days. In the past year, HCI Group stock has lost 17.4%.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share indicates year-over-year increases of 280.9% and 75%, respectively.
RLI has a solid track record of beating earnings estimates in each of the last seven quarters. In the past year, RLI stock has increased 9.5%.
The Zacks Consensus Estimate for RLI’s 2022 and 2023 earnings per share is pegged at $4.35 and $4.45, indicating year-over-year increases of 12.4% and 2.3%, respectively.