MetLife, Inc. ( MET Quick Quote MET - Free Report) remains well-poised for growth, courtesy of sustained performance of variable investment income (VII), diversified product suite, cost-cutting efforts and strong liquidity stand. Zacks Rank & Price Performance
MetLife carries a Zacks Rank #2 (Buy) currently.
The stock has gained 4% over a year against the
industry’s decline of 14.5%. The Zacks Finance sector has lost 13.5% in the said time frame. Meanwhile, the S&P 500 composite has declined 12%. Image Source: Zacks Investment Research Favorable Style Score
MetLife carries an impressive
Value Score of A. Value Score helps find stocks that are undervalued. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment bets. Impressive Earnings Surprise History
MET boasts an impressive earnings surprise record. It has surpassed earnings estimates in each of the trailing four quarters, the average surprise being 42.90%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 earnings has been revised upward by 5.9% and 2%, respectively, in the past 60 days.
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 0.9. It is quite evident that the stock is currently undervalued.
Solid Return on Equity
The ROE of MetLife stands at 12% in the trailing 12 months, which remains higher than the industry average of 9.2%. This reflects MET’s efficiency in utilizing its shareholders’ funds.
Margins of MetLife continue to benefit from strong VII. A recovering economy signaling an improving operating environment and interest rate hikes are expected to sustain the sound performance of the metric in the days ahead.
MetLife resorts to acquisitions and partnerships to boost its capabilities and strengthen its nationwide presence. Continuous product launches in different fields like MyPets rewards program, Structured Installment Sale solution, 360Health solution and others enable MET to foray into diverse streams of business. The multiline insurer makes constant efforts to keep pace with the ongoing digital trend, which has fueled noticeable demand for digital security benefits to the workforce. In February 2022, MetLife entered into an alliance with the renowned intelligent safety solutions provider Aura to distribute the latter’s digital security solutions within MET’s U.S. Group Benefits platform.
MetLife continues to undertake prudent cost-cutting initiatives with an aim to provide a boost to the bottom line. As part of the same endeavor, MET expects the direct expense ratio to remain below the targeted figure of 12.3% for 2022. Meanwhile, it has been divesting underperforming businesses to intensify its focus on high-growth ones and generate increased free cash flows, which in turn will aid MetLife in pursuing several growth-related initiatives.
MetLife boasts of a strong financial position, supported by a sound cash balance sufficient enough to cover the short-term obligations of the multiline insurer and encouraging it to continuously pursue tactical deployment of capital through share buybacks and
dividend hikes. In May 2022, MET approved a share repurchase program of $3 billion. Its dividend yield of 3.2% compares favorably with the industry’s figure of 2.5%. Other Stocks to Consider
Some other top-ranked stocks in the insurance space include
American International Group, Inc. ( AIG Quick Quote AIG - Free Report) , MGIC Investment Corporation ( MTG Quick Quote MTG - Free Report) and Chubb Limited ( CB Quick Quote CB - Free Report) , each carrying a Zacks Rank #2. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
The bottom line of American International outpaced estimates in each of the trailing four quarters, the average surprise being 18.87%. The Zacks Consensus Estimate for AIG’s 2022 earnings suggests 1.2% year-over-year growth, while the same for revenues implies an improvement of 0.6%. The consensus mark for American International’s 2022 earnings has moved north by 2% in the past 60 days.
MGIC Investment’s earnings outpaced estimates in three of the trailing three quarters and met once, the average surprise being 10.94%. The Zacks Consensus Estimate for MTG’s 2022 earnings indicates 18.9% year-over-year growth. MGIC Investment’s consensus mark for 2022 earnings has moved north by 1.8% in the past 60 days.
The bottom line of Chubb outpaced estimates in each of the trailing four quarters, the average surprise being 13.45%. The Zacks Consensus Estimate for CB’s 2022 earnings suggests 19.1% year-over-year growth, while the same for revenues implies an improvement of 3.9%. The consensus mark for Chubb’s 2022 earnings has moved north by 0.3% in the past 60 days.
Shares of MGIC Investment and Chubb have gained 11% and 19.8%, respectively, in a year. However, American International stock has lost 4.9% in the same time frame.