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Here's Why You Should Hold Brighthouse Financial (BHF) Stock
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Brighthouse Financial, Inc. (BHF - Free Report) has been gaining momentum on the back of higher Annuity sales, conservative investment strategy and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Brighthouse’s 2023 earnings is pegged at $14.10, indicating a 29% increase from the year-ago reported figure. The Zacks Consensus Estimate for BHF’s 2023 revenues is pegged at $8.21 billion.
The consensus estimate for 2024 earnings is pegged at $16.64, indicating an 18% increase from the year-ago reported figure on 2.5% higher revenues of $8.41 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for Brighthouse’s 2023 and 2024 earnings has moved 0.6% and 0.4% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Zacks Rank & Price Performance
Brighthouse currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 18.6%, outperforming the industry’s growth of 13.4%.
Image Source: Zacks Investment Research
Business Tailwinds
Brighthouse remains well-poised for growth with solid performances by the Annuities and Life segments.
Growth in Annuity sales is likely to be driven by record sales of Shield Level annuities and variable annuities with FlexChoice Access, while higher Life sales should continue to gain from sales of SmartCare, both exceeding the insurer’s expectations. In the first quarter, record annuity sales reflect the strength and complementary nature of the product suite. BHF expects annuity sales for 2023 to be $4.8 billion.
BHF remained focused on enhancing the product portfolio with the launch of Shield Level Pay Plus, which is an addition to the suite of Shield Annuities. This product is designed to meet the requirements in retirement planning. Another addition to the Shield Level Annuities product suite was the Shield Options with Step Rate Edge. BHF remains focused on offering a portfolio of products that help meet the evolving needs of clients.
Brighthouse Financial is one of the largest providers of life insurance products in the United States. Given the company’s expansive and compelling suite of life products, BHF should benefit from the growing individual insurance market. The insurer remains focused on ramping up new sales of life insurance products and expanding its distribution network, aiming to become a premier player in the industry.
The company recently unveiled a life insurance product known as Brighthouse SmartGuard Plus, which is intended to aid the clients to supplement their income at the time of retirement. It also includes a guaranteed death benefit, which is income tax free and will help clients ensure their family’s financial security.
Riding on higher alternative investment income, a well-diversified and high-quality portfolio as well as a conservative investment strategy, Brighthouse’s adjusted net investment income is expected to improve. BHF expects an annual alternative investment yield between 9% and 11% over the long term.
In the first quarter of 2023, BHF delivered strong results with an estimated combined risk-based capital ratio between 460% and 480%, which is above the targeted range of 400% to 450% in normal markets. The ratio continued to gain from normalized statutory earnings of approximately $200 million, which was driven by the previously mentioned favorable variable annuity results.
A solid statutory balance sheet and sufficient cash continue to support the repurchase strategy. As of Mar 31, 2023, Brighthouse Financial had $231 million remaining under its share repurchase program.
American Equity Investment has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 13.01%. In the past year, AEL’s shares have surged 47.8%.
The Zacks Consensus Estimate for AEL’s 2023 and 2024 earnings per share indicates a year-over-year increase of 77.6% and 2.7%, respectively.
Manulife Financial has a decent track record of beating earnings surprise in three of the last four quarters while missing once, the average beat being 1.55%. In the past year, MFC’s shares have gained 9.4%.
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $2.44 and $2.62, indicating an increase of 2.5% and 7.4% year over year, respectively.
Primerica’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters while missing in one, the average being 3.81%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates a year-over-year increase of 34% and 11.4%, respectively. In the past year, PRI’s shares have rallied 69.7%.
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Here's Why You Should Hold Brighthouse Financial (BHF) Stock
Brighthouse Financial, Inc. (BHF - Free Report) has been gaining momentum on the back of higher Annuity sales, conservative investment strategy and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Brighthouse’s 2023 earnings is pegged at $14.10, indicating a 29% increase from the year-ago reported figure. The Zacks Consensus Estimate for BHF’s 2023 revenues is pegged at $8.21 billion.
The consensus estimate for 2024 earnings is pegged at $16.64, indicating an 18% increase from the year-ago reported figure on 2.5% higher revenues of $8.41 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for Brighthouse’s 2023 and 2024 earnings has moved 0.6% and 0.4% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Zacks Rank & Price Performance
Brighthouse currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 18.6%, outperforming the industry’s growth of 13.4%.
Image Source: Zacks Investment Research
Business Tailwinds
Brighthouse remains well-poised for growth with solid performances by the Annuities and Life segments.
Growth in Annuity sales is likely to be driven by record sales of Shield Level annuities and variable annuities with FlexChoice Access, while higher Life sales should continue to gain from sales of SmartCare, both exceeding the insurer’s expectations. In the first quarter, record annuity sales reflect the strength and complementary nature of the product suite. BHF expects annuity sales for 2023 to be $4.8 billion.
BHF remained focused on enhancing the product portfolio with the launch of Shield Level Pay Plus, which is an addition to the suite of Shield Annuities.
This product is designed to meet the requirements in retirement planning. Another addition to the Shield Level Annuities product suite was the Shield Options with Step Rate Edge. BHF remains focused on offering a portfolio of products that help meet the evolving needs of clients.
Brighthouse Financial is one of the largest providers of life insurance products in the United States. Given the company’s expansive and compelling suite of life products, BHF should benefit from the growing individual insurance market. The insurer remains focused on ramping up new sales of life insurance products and expanding its distribution network, aiming to become a premier player in the industry.
The company recently unveiled a life insurance product known as Brighthouse SmartGuard Plus, which is intended to aid the clients to supplement their income at the time of retirement. It also includes a guaranteed death benefit, which is income tax free and will help clients ensure their family’s financial security.
Riding on higher alternative investment income, a well-diversified and high-quality portfolio as well as a conservative investment strategy, Brighthouse’s adjusted net investment income is expected to improve. BHF expects an annual alternative investment yield between 9% and 11% over the long term.
In the first quarter of 2023, BHF delivered strong results with an estimated combined risk-based capital ratio between 460% and 480%, which is above the targeted range of 400% to 450% in normal markets. The ratio continued to gain from normalized statutory earnings of approximately $200 million, which was driven by the previously mentioned favorable variable annuity results.
A solid statutory balance sheet and sufficient cash continue to support the repurchase strategy. As of Mar 31, 2023, Brighthouse Financial had $231 million remaining under its share repurchase program.
Stocks to Consider
Some better-ranked stocks from the life insurance industry are American Equity Investment Life Holding Company , Manulife Financial Corp. (MFC - Free Report) and Primerica, Inc (PRI - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Equity Investment has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 13.01%. In the past year, AEL’s shares have surged 47.8%.
The Zacks Consensus Estimate for AEL’s 2023 and 2024 earnings per share indicates a year-over-year increase of 77.6% and 2.7%, respectively.
Manulife Financial has a decent track record of beating earnings surprise in three of the last four quarters while missing once, the average beat being 1.55%. In the past year, MFC’s shares have gained 9.4%.
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $2.44 and $2.62, indicating an increase of 2.5% and 7.4% year over year, respectively.
Primerica’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters while missing in one, the average being 3.81%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates a year-over-year increase of 34% and 11.4%, respectively. In the past year, PRI’s shares have rallied 69.7%.