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Here's Why Brighthouse Financial (BHF) is an Attractive Bet
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Brighthouse Financial, Inc. (BHF - Free Report) is well-poised for growth, driven by higher alternative investment income, conservative investment strategy, enhancement of product portfolio and sufficient liquidity.
Estimate Revision
The Zacks Consensus Estimate for Brighthouse’s 2022 and 2023 earnings has moved 4.3% and 0.6% north, respectively, in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Brighthouse has a solid track record of beating earnings estimates in each of the last six quarters.
Zacks Rank & Price Performance
Brighthouse currently carries a Zacks Rank #2 (Buy). In the past year, the stock has lost 7% compared with the industry’s decrease of 13.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Brighthouse’s ROE for the trailing 12 months is 11.6%, expanding 520 basis points year over year. This compares favorably with the industry average of 9.2%. ROE reflects the insurer’s efficiency in using shareholders’ funds.
Business Tailwinds
Brighthouse remains well poised for growth with solid performances by the Annuities, Life and Run-off segments. Riding on higher alternative investment income, a well-diversified and high-quality portfolio as well a conservative investment strategy, Brighthouse’s adjusted net investment income is expected to improve.
The Run-off segment is likely to gain on the back of higher net investment income, higher underwriting margin and lower expenses.
Brighthouse remains focused on ramping up annuity and life insurance sales by widening its distribution footprint and enhancing its product portfolio.
Higher fees and higher deferred acquisition costs ("DAC"), amortization and lower expenses should benefit Annuities.
Balance sheet and liquidity positions continued to remain strong. BHF continues to make additional progress toward shifting its business mix profile.
BHF estimates combined risk-based capital ratio between 450% and 470%, above the target of 400% to 450% in normal markets. BHF continued to have significant holding company liquid assets.
The life insurer remains focused on enhancing the business mix by adding high-quality new business.
A solid statutory balance sheet and sufficient cash continue to support the repurchase strategy. Currently, it has $654 million remaining under its share repurchase authorization.
Brighthouse has an impressive Value Score of A. The stock remains undervalued at the current level. BHF currently has a trailing 12-month price-to-book value ratio of 0.24, lower than the industry average of 0.30.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are American Financial Group, Inc. (AFG - Free Report) , United Fire Group, Inc. (UFCS - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While American Financial Group sports a Zacks Rank #1 (Strong Buy), United Fire and Axis Capital carry a Zacks Rank #2 . You can see the complete list of today’s Zacks #1 Rank stocks here.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 41.72%. In the past year, American Financial has gained 12.1%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% north, respectively, in the past 60 days.
United Fire’s earnings surpassed estimates in three of the last four quarters and matched in one, the average earnings surprise being 270.8%. In the past year, UFCS stock has gained 36.5%.
The Zacks Consensus Estimate for United Fire’s 2022 earnings has moved 23.5% north in the past 60 days.
Axis Capital’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 54.8%. In the past year, AXS stock has gained 14%.
The Zacks Consensus Estimate for Axis Capital’s 2022 and 2023 earnings per share indicates a year-over-year increase of 23.6% and 7%, respectively.
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Here's Why Brighthouse Financial (BHF) is an Attractive Bet
Brighthouse Financial, Inc. (BHF - Free Report) is well-poised for growth, driven by higher alternative investment income, conservative investment strategy, enhancement of product portfolio and sufficient liquidity.
Estimate Revision
The Zacks Consensus Estimate for Brighthouse’s 2022 and 2023 earnings has moved 4.3% and 0.6% north, respectively, in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Brighthouse has a solid track record of beating earnings estimates in each of the last six quarters.
Zacks Rank & Price Performance
Brighthouse currently carries a Zacks Rank #2 (Buy). In the past year, the stock has lost 7% compared with the industry’s decrease of 13.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Brighthouse’s ROE for the trailing 12 months is 11.6%, expanding 520 basis points year over year. This compares favorably with the industry average of 9.2%. ROE reflects the insurer’s efficiency in using shareholders’ funds.
Business Tailwinds
Brighthouse remains well poised for growth with solid performances by the Annuities, Life and Run-off segments. Riding on higher alternative investment income, a well-diversified and high-quality portfolio as well a conservative investment strategy, Brighthouse’s adjusted net investment income is expected to improve.
The Run-off segment is likely to gain on the back of higher net investment income, higher underwriting margin and lower expenses.
Brighthouse remains focused on ramping up annuity and life insurance sales by widening its distribution footprint and enhancing its product portfolio.
Higher fees and higher deferred acquisition costs ("DAC"), amortization and lower expenses should benefit Annuities.
Balance sheet and liquidity positions continued to remain strong. BHF continues to make additional progress toward shifting its business mix profile.
BHF estimates combined risk-based capital ratio between 450% and 470%, above the target of 400% to 450% in normal markets. BHF continued to have significant holding company liquid assets.
The life insurer remains focused on enhancing the business mix by adding high-quality new business.
A solid statutory balance sheet and sufficient cash continue to support the repurchase strategy. Currently, it has $654 million remaining under its share repurchase authorization.
Brighthouse has an impressive Value Score of A. The stock remains undervalued at the current level. BHF currently has a trailing 12-month price-to-book value ratio of 0.24, lower than the industry average of 0.30.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are American Financial Group, Inc. (AFG - Free Report) , United Fire Group, Inc. (UFCS - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While American Financial Group sports a Zacks Rank #1 (Strong Buy), United Fire and Axis Capital carry a Zacks Rank #2 . You can see the complete list of today’s Zacks #1 Rank stocks here.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 41.72%. In the past year, American Financial has gained 12.1%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% north, respectively, in the past 60 days.
United Fire’s earnings surpassed estimates in three of the last four quarters and matched in one, the average earnings surprise being 270.8%. In the past year, UFCS stock has gained 36.5%.
The Zacks Consensus Estimate for United Fire’s 2022 earnings has moved 23.5% north in the past 60 days.
Axis Capital’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 54.8%. In the past year, AXS stock has gained 14%.
The Zacks Consensus Estimate for Axis Capital’s 2022 and 2023 earnings per share indicates a year-over-year increase of 23.6% and 7%, respectively.