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MetLife (MET) Stock Gains 18.2% in 6 Months: More Room to Run?
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MetLife, Inc.’s (MET - Free Report) shares have gained 18.2% in the past six months, outperforming 12.3% growth of the industry, supported by rising investment returns, improving contributions from the U.S. business and strong financials.
Headquartered in New York, MetLife is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers. MET currently has a market cap of $49.7 billion.
Image Source: Zacks Investment Research
Can It Retain Momentum?
The answer is yes, thanks to rising estimates, technological innovation, improving operating strength and its cost-curbing initiatives.
The Zacks Consensus Estimate for MetLife’s 2023 earnings per share (EPS) is pegged at $7.46, indicating an 8.9% rise from $6.85 a year ago. MetLife has undertaken several strategies to control costs and increase efficiencies. The company’s direct expense ratio was 12.3% for the third quarter, lower than the 2023 target of 12.6%. Although the company expects its fourth-quarter expense ratio to be a bit higher, owing to seasonality, it is confident of beating its target amid an inflationary environment. The consensus estimate for 2023 revenues stands at $70.8 billion.
MetLife’s adjusted net investment income is on the rise. The metric jumped 21% year over year to $5,056 million in the third quarter. Earlier, this Zacks Rank #3 (Hold) company stated that it expects pre-tax variable investment income to be around $2 billion for this year.
The company’s strong operations in the United States and Asia position the company for long-term growth. MET expects its group benefits’ adjusted premiums, fees and other revenues to grow 4-6% per annum. Moreover, it expects the group life mortality ratio to be in the range of 85-90% for 2023, benefiting the segment’s bottom line. Better underwriting margins and robust volume growth should fuel growth of the U.S. segment. Product introductions in Japan favored the results in Asia in the third quarter. The company expects Asia's year-over-year sales growth to be near the top end of its mid-to-high single-digit guidance for 2023.
The adoption of technology is expected to help insurers in seamless underwriting and claims processing. Hence, MET has launched a digital platform in Latin America, smoothly integrating insurance solutions, and is expected to grow its business in the future. MET expects to continue investing in emerging technologies as it will help them achieve greater scale advantage and improve customer experience.
MET has a strong shareholder value-boosting program in place. It bought back shares worth $800 million in the third quarter and an additional $250 million in October 2023. It paid dividends worth $400 million in the third quarter. Its dividend yield of 3.1% is higher than the industry average of 2.6%.
MetLife boasts an impressive VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
HCI Group has a solid track record of beating earnings estimates in each of the last four quarters, the average being 519.6%.
The Zacks Consensus Estimate for HCI’s 2023 and 2024 EPS is pegged at $5.20 and $7.87, indicating a year-over-year increase of 194.9% and 51.4%, respectively.
Axis Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 22.5%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 EPS is pegged at $8.56 and $9.55, indicating a year-over-year increase of 47.3% and 11.6%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 38.3%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 EPS is pegged at $5.58 and $6.05, indicating a year-over-year increase of 31.6% and 8.5%, respectively.
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MetLife (MET) Stock Gains 18.2% in 6 Months: More Room to Run?
MetLife, Inc.’s (MET - Free Report) shares have gained 18.2% in the past six months, outperforming 12.3% growth of the industry, supported by rising investment returns, improving contributions from the U.S. business and strong financials.
Headquartered in New York, MetLife is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers. MET currently has a market cap of $49.7 billion.
Image Source: Zacks Investment Research
Can It Retain Momentum?
The answer is yes, thanks to rising estimates, technological innovation, improving operating strength and its cost-curbing initiatives.
The Zacks Consensus Estimate for MetLife’s 2023 earnings per share (EPS) is pegged at $7.46, indicating an 8.9% rise from $6.85 a year ago. MetLife has undertaken several strategies to control costs and increase efficiencies. The company’s direct expense ratio was 12.3% for the third quarter, lower than the 2023 target of 12.6%. Although the company expects its fourth-quarter expense ratio to be a bit higher, owing to seasonality, it is confident of beating its target amid an inflationary environment. The consensus estimate for 2023 revenues stands at $70.8 billion.
MetLife’s adjusted net investment income is on the rise. The metric jumped 21% year over year to $5,056 million in the third quarter. Earlier, this Zacks Rank #3 (Hold) company stated that it expects pre-tax variable investment income to be around $2 billion for this year.
The company’s strong operations in the United States and Asia position the company for long-term growth. MET expects its group benefits’ adjusted premiums, fees and other revenues to grow 4-6% per annum. Moreover, it expects the group life mortality ratio to be in the range of 85-90% for 2023, benefiting the segment’s bottom line. Better underwriting margins and robust volume growth should fuel growth of the U.S. segment. Product introductions in Japan favored the results in Asia in the third quarter. The company expects Asia's year-over-year sales growth to be near the top end of its mid-to-high single-digit guidance for 2023.
The adoption of technology is expected to help insurers in seamless underwriting and claims processing. Hence, MET has launched a digital platform in Latin America, smoothly integrating insurance solutions, and is expected to grow its business in the future. MET expects to continue investing in emerging technologies as it will help them achieve greater scale advantage and improve customer experience.
MET has a strong shareholder value-boosting program in place. It bought back shares worth $800 million in the third quarter and an additional $250 million in October 2023. It paid dividends worth $400 million in the third quarter. Its dividend yield of 3.1% is higher than the industry average of 2.6%.
MetLife boasts an impressive VGM Score of B. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Stocks to Consider
Some better-ranked stocks from the broader Finance are HCI Group, Inc. (HCI - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While HCI Group presently sports a Zacks Rank #1 (Strong Buy), Axis Capital and Cincinnati Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the last four quarters, the average being 519.6%.
The Zacks Consensus Estimate for HCI’s 2023 and 2024 EPS is pegged at $5.20 and $7.87, indicating a year-over-year increase of 194.9% and 51.4%, respectively.
Axis Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 22.5%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 EPS is pegged at $8.56 and $9.55, indicating a year-over-year increase of 47.3% and 11.6%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 38.3%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 EPS is pegged at $5.58 and $6.05, indicating a year-over-year increase of 31.6% and 8.5%, respectively.