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Reasons Why Globe Life (GL) Stock is an Attractive Pick Now
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Globe Life Inc. (GL - Free Report) has been gaining momentum on the back of premium growth, improved productivity and agent count, new investment yields, strong liquidity position and effective capital deployment.
Earnings Estimate
The Zacks Consensus Estimate for Globe Life’s 2023 earnings is pegged at $10.60 per share, indicating a 30% increase from the year-ago reported figure on 4.2% higher revenues of $5.51 billion. The consensus estimate for 2024 earnings is pegged at $11.44 per share, indicating a 7.9% increase from the year-ago reported figure on 5.1% higher revenues of $5.80 billion.
Earnings Surprise History
Globe Life has a decent surprise history, beating earnings estimates in each of the last four quarters, the average earnings surprise being 2.25%.
Zacks Rank & Price Performance
GL currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 3.2% against the industry’s decline of 0.3%.
Image Source: Zacks Investment Research
Return on Equity
Globe Life’s return on equity, a measure reflecting how efficiently a company utilizes shareholders’ money, was 22.6% in the trailing 12 months and expanded 1,060 basis points year over year. The figure compares favorably with the industry’s average of 15.2%.
Attractive Valuation
Globe Life shares are trading at a price-to-earnings multiple of 10.66, lower than the industry average of 12.06. It also has an impressive Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer better returns.
Factors Driving Globe Life
Globe Life has been witnessing a positive trend in revenues, driven by premium growth in its Life Insurance and Health Insurance segments and net investment income.
The strong performance of the American Income and Liberty National divisions should continue to drive the top line in the future. Liberty National should continue to benefit from improved productivity and agent count. GL’s expansion initiatives to capture heavily populated and less penetrated areas should drive growth in the future. Net life sales, as well as net health sales, are expected to grow in the mid-teens for Liberty National.
Moreover, net investment income continues to be another important driver of the company’s top-line growth and has been exhibiting improvement over the last few years. The metric should continue to grow riding on new investment yields exceeding the yield on dispositions and the average portfolio yield. For 2023, Globe Life expects net investment income to grow approximately 7% due to the combination of the favorable rate environment and steady growth in invested assets. For 2023, GL also expects excess investment income to grow approximately $25 million.
The company has maintained a strong liquidity position with sufficient cash-generation capabilities. Its operations consist primarily of writing basic protection life and supplemental health insurance policies, which generate strong and stable cash flows. The insurer anticipates the parent company's excess cash flow for 2023 to be around $425 million. Globe Life continues to maintain the Company Action Level Risk-Based Capital ratio target in the band of 300% to 320%.
A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. GL anticipates approximately $465 million of capital, which will be returned to shareholders in 2023, including approximately $380 million through share repurchases. The company expects repurchases in the range of $325-$350 million. Apart from this, the insurer has continuously been increasing its dividend over the past eight years (2016-2023), witnessing a CAGR of 6.79%.
The Zacks Consensus Estimate for Greystone Housing’s 2023 and 2024 revenues is pegged at $106 million and $107 million, indicating a year-over-year increase of 30.7% and 1%, respectively. In the past year, GHI has lost 10.8%.
The Zacks Consensus Estimates for GHI’s 2023 and 2024 earnings have moved up nearly 13.9% and 4%, respectively, in the past 30 days, reflecting investors’ optimism.
Blue Owl Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 3.35%. In the past year, OBDC has gained 15.4%.
The Zacks Consensus Estimates for 2023 and 2024 earnings have moved up nearly 2.7% and 4.5%, respectively, in the past 30 days, reflecting investors’ optimism.
StoneX has a solid track record of beating earnings estimates in three of the last four quarters and missed in one, the average being 14.37%. In the past year, SNEX has lost 7.3%.
The Zacks Consensus Estimate for SNEX’s 2023 and 2024 revenues is pegged at $3.11 billion and $3.14 billion, indicating a year-over-year increase of 19% and 1%, respectively.
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Reasons Why Globe Life (GL) Stock is an Attractive Pick Now
Globe Life Inc. (GL - Free Report) has been gaining momentum on the back of premium growth, improved productivity and agent count, new investment yields, strong liquidity position and effective capital deployment.
Earnings Estimate
The Zacks Consensus Estimate for Globe Life’s 2023 earnings is pegged at $10.60 per share, indicating a 30% increase from the year-ago reported figure on 4.2% higher revenues of $5.51 billion. The consensus estimate for 2024 earnings is pegged at $11.44 per share, indicating a 7.9% increase from the year-ago reported figure on 5.1% higher revenues of $5.80 billion.
Earnings Surprise History
Globe Life has a decent surprise history, beating earnings estimates in each of the last four quarters, the average earnings surprise being 2.25%.
Zacks Rank & Price Performance
GL currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 3.2% against the industry’s decline of 0.3%.
Image Source: Zacks Investment Research
Return on Equity
Globe Life’s return on equity, a measure reflecting how efficiently a company utilizes shareholders’ money, was 22.6% in the trailing 12 months and expanded 1,060 basis points year over year. The figure compares favorably with the industry’s average of 15.2%.
Attractive Valuation
Globe Life shares are trading at a price-to-earnings multiple of 10.66, lower than the industry average of 12.06. It also has an impressive Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer better returns.
Factors Driving Globe Life
Globe Life has been witnessing a positive trend in revenues, driven by premium growth in its Life Insurance and Health Insurance segments and net investment income.
The strong performance of the American Income and Liberty National divisions should continue to drive the top line in the future. Liberty National should continue to benefit from improved productivity and agent count. GL’s expansion initiatives to capture heavily populated and less penetrated areas should drive growth in the future. Net life sales, as well as net health sales, are expected to grow in the mid-teens for Liberty National.
Moreover, net investment income continues to be another important driver of the company’s top-line growth and has been exhibiting improvement over the last few years. The metric should continue to grow riding on new investment yields exceeding the yield on dispositions and the average portfolio yield. For 2023, Globe Life expects net investment income to grow approximately 7% due to the combination of the favorable rate environment and steady growth in invested assets. For 2023, GL also expects excess investment income to grow approximately $25 million.
The company has maintained a strong liquidity position with sufficient cash-generation capabilities. Its operations consist primarily of writing basic protection life and supplemental health insurance policies, which generate strong and stable cash flows. The insurer anticipates the parent company's excess cash flow for 2023 to be around $425 million. Globe Life continues to maintain the Company Action Level Risk-Based Capital ratio target in the band of 300% to 320%.
A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. GL anticipates approximately $465 million of capital, which will be returned to shareholders in 2023, including approximately $380 million through share repurchases. The company expects repurchases in the range of $325-$350 million. Apart from this, the insurer has continuously been increasing its dividend over the past eight years (2016-2023), witnessing a CAGR of 6.79%.
Other Stocks to Consider
Some other top-ranked stocks from the Financial-Miscellaneous Services space are Greystone Housing Impact Investors LP (GHI - Free Report) , Blue Owl Capital Corporation (OBDC - Free Report) and StoneX Group Inc. (SNEX - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Greystone Housing’s 2023 and 2024 revenues is pegged at $106 million and $107 million, indicating a year-over-year increase of 30.7% and 1%, respectively. In the past year, GHI has lost 10.8%.
The Zacks Consensus Estimates for GHI’s 2023 and 2024 earnings have moved up nearly 13.9% and 4%, respectively, in the past 30 days, reflecting investors’ optimism.
Blue Owl Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 3.35%. In the past year, OBDC has gained 15.4%.
The Zacks Consensus Estimates for 2023 and 2024 earnings have moved up nearly 2.7% and 4.5%, respectively, in the past 30 days, reflecting investors’ optimism.
StoneX has a solid track record of beating earnings estimates in three of the last four quarters and missed in one, the average being 14.37%. In the past year, SNEX has lost 7.3%.
The Zacks Consensus Estimate for SNEX’s 2023 and 2024 revenues is pegged at $3.11 billion and $3.14 billion, indicating a year-over-year increase of 19% and 1%, respectively.