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Here's Why You Should Invest in Voya Financial (VOYA) Stock
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Voya Financial, Inc.’s (VOYA - Free Report) strategic acquisitions, favorable retention, positive impacts of the Benefitfocus acquisition, improved investment income, stronger surplus income and sufficient liquidity make it worth retaining in one’s portfolio.
Growth Projections
The consensus estimate for 2024 earnings is pegged at $8.87 per share, indicating a 17.7% increase from the year-ago reported figure on 4.8% higher revenues of $1.31 billion.
Earnings Surprise History
Voya Financial has a solid earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average being 13.12%.
Zacks Rank & Price Performance
VOYA currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 19.7%, outperforming the industry’s rise of 15.9%.
Image Source: Zacks Investment Research
Return on Equity
The life insurer’s trailing 12-month return on equity was 16.9% in the third quarter of 2023, which expanded 560 basis points year over year. The figure reflects its efficiency in utilizing its shareholders’ funds.
Business Tailwinds
VOYA’s earnings are driven by its solid segmental performances across Wealth Solutions, Investment Management and Health Solutions. These businesses are higher-growth, higher-return and capital-light units, boasting the company’s solid presence in the market.
The Wealth Solutions segment is steadily witnessing significant growth on the back of continued strength in underlying business results, higher surplus income, lower credited interest, improved investment income, weaker fee-based margin, a favorable change in deferred acquisition costs, and value of business acquired and lower administrative expenses. In Wealth Solutions, full-service recurring deposits should continue to gain from growth in the corporate markets.
The Investment Management segment should gain from higher investment capital returns due to its overall market performance and improved fee revenues, driven by higher average equity markets and positive net flows.
VOYA is constantly taking strategic steps to ramp up growth in its Investment Management segment. Voya Financial and Allianz Global Investors inked a long-term strategic partnership that added scale and diversification to Voya Investment Management. The transaction is expected to be accretive to VOYA’s adjusted operating earnings per share, which is estimated at 6-8% for 2023. In addition, Voya Investment Management’s adjusted operating margin is expected to increase 29-31% in 2023 and 30-32% in 2024.
The Health Solutions segment of Voya Financial is likely to benefit from growth across all product lines, favorable retention and the positive impacts of the Benefitfocus acquisition.
The company’s capital levels remain strong. As of Sep 30, 2023, the estimated combined risk-based capital ratio, with adjustments for certain intercompany transactions, was 403%. VOYA’s organic capital generation demonstrates the high free cash flow generation of businesses. This financial flexibility provides strength to the insurer.
Operational excellence has been helping the company to deploy capital for enhancing shareholders’ value. Increasing the dividend continues to reflect its confidence in the stability of cash flows at more than 90% free cash flow conversion and will help broaden the insurer’s investor base.
Reinsurance Group has a decent record of beating the earnings surprise in three of the last four quarters, while missing once, the average beat being 18.81%.
The Zacks Consensus Estimate for RGA’s 2023 and 2024 earnings has moved 3.5% and 2.3% north, respectively, in the past 30 days. In the past year, RGA’s shares have gained 22.6%.
Primerica has a decent record of beating the earnings surprise in each of the last four quarters, the average beat being 7.84%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates year-over-year increases of 39.8% and 9.8%, respectively. In the past year, PRI shares have gained 51.7%.
The Zacks Consensus Estimate for GoHealth’s 2023 and 2024 revenues indicates year-over-year increases of 29.9% and 8.5%, respectively.
The Zacks Consensus Estimate for GOCO’s 2023 and 2024 earnings per share indicates year-over-year increases of 77.8% and 40.9%, respectively. In the past year, shares of GOCO have lost 5.3%.
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Here's Why You Should Invest in Voya Financial (VOYA) Stock
Voya Financial, Inc.’s (VOYA - Free Report) strategic acquisitions, favorable retention, positive impacts of the Benefitfocus acquisition, improved investment income, stronger surplus income and sufficient liquidity make it worth retaining in one’s portfolio.
Growth Projections
The consensus estimate for 2024 earnings is pegged at $8.87 per share, indicating a 17.7% increase from the year-ago reported figure on 4.8% higher revenues of $1.31 billion.
Earnings Surprise History
Voya Financial has a solid earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average being 13.12%.
Zacks Rank & Price Performance
VOYA currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 19.7%, outperforming the industry’s rise of 15.9%.
Image Source: Zacks Investment Research
Return on Equity
The life insurer’s trailing 12-month return on equity was 16.9% in the third quarter of 2023, which expanded 560 basis points year over year. The figure reflects its efficiency in utilizing its shareholders’ funds.
Business Tailwinds
VOYA’s earnings are driven by its solid segmental performances across Wealth Solutions, Investment Management and Health Solutions. These businesses are higher-growth, higher-return and capital-light units, boasting the company’s solid presence in the market.
The Wealth Solutions segment is steadily witnessing significant growth on the back of continued strength in underlying business results, higher surplus income, lower credited interest, improved investment income, weaker fee-based margin, a favorable change in deferred acquisition costs, and value of business acquired and lower administrative expenses. In Wealth Solutions, full-service recurring deposits should continue to gain from growth in the corporate markets.
The Investment Management segment should gain from higher investment capital returns due to its overall market performance and improved fee revenues, driven by higher average equity markets and positive net flows.
VOYA is constantly taking strategic steps to ramp up growth in its Investment Management segment. Voya Financial and Allianz Global Investors inked a long-term strategic partnership that added scale and diversification to Voya Investment Management. The transaction is expected to be accretive to VOYA’s adjusted operating earnings per share, which is estimated at 6-8% for 2023. In addition, Voya Investment Management’s adjusted operating margin is expected to increase 29-31% in 2023 and 30-32% in 2024.
The Health Solutions segment of Voya Financial is likely to benefit from growth across all product lines, favorable retention and the positive impacts of the Benefitfocus acquisition.
The company’s capital levels remain strong. As of Sep 30, 2023, the estimated combined risk-based capital ratio, with adjustments for certain intercompany transactions, was 403%. VOYA’s organic capital generation demonstrates the high free cash flow generation of businesses. This financial flexibility provides strength to the insurer.
Operational excellence has been helping the company to deploy capital for enhancing shareholders’ value. Increasing the dividend continues to reflect its confidence in the stability of cash flows at more than 90% free cash flow conversion and will help broaden the insurer’s investor base.
Stocks to Consider
Some better-ranked stocks from the life-insurance industry are Reinsurance Group of America, Incorporated (RGA - Free Report) , Primerica, Inc. (PRI - Free Report) and GoHealth, Inc. (GOCO - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Reinsurance Group has a decent record of beating the earnings surprise in three of the last four quarters, while missing once, the average beat being 18.81%.
The Zacks Consensus Estimate for RGA’s 2023 and 2024 earnings has moved 3.5% and 2.3% north, respectively, in the past 30 days. In the past year, RGA’s shares have gained 22.6%.
Primerica has a decent record of beating the earnings surprise in each of the last four quarters, the average beat being 7.84%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates year-over-year increases of 39.8% and 9.8%, respectively. In the past year, PRI shares have gained 51.7%.
The Zacks Consensus Estimate for GoHealth’s 2023 and 2024 revenues indicates year-over-year increases of 29.9% and 8.5%, respectively.
The Zacks Consensus Estimate for GOCO’s 2023 and 2024 earnings per share indicates year-over-year increases of 77.8% and 40.9%, respectively. In the past year, shares of GOCO have lost 5.3%.