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On Sep 5, 2016, we issued an updated research report on Genworth Financial, Inc. (GNW - Free Report) .
Genworth Financial has been concentrating on streamlining and rationalizing its business to improve performance, enhance financial and strategic flexibility, strengthen mortgage insurance, and increase excess capital, earnings and return on equity (ROE). In keeping with its growth plans, Genworth is in the process of separating the long-term care business to restructure the U.S. Life vertical.
Moreover, the mortgage business of the company has been reporting profits in recent times. In fact, the last reported quarter was the eleventh consecutive quarter in which the company made profits after incurring losses over a long period. The upside in the quarter was largely driven by a better performing U.S. Mortgage Insurance.
Further, the life insurer intends to lower its debt level. Genworth deployed a large portion of the LPI sales proceeds to fund the 2016 debt at maturity, which in turn, will lower interest expense by about $25 million in 2016.
Exemplary performance by the mortgage division is helping Genworth receive dividends from its subsidiary. For 2016, Genworth estimates dividends between $100 million and $150 million.
Riding on the operational strength, the Zacks Rank #2 (Buy) life insurer delivered positive surprise in two of the last four quarters.
However, exposure to a low interest rate environment has been adversely affecting the company’s investment results. Given the downward trend of investment results, the company does not expect any immediate turnaround in the near term.
Stocks to Consider
Investors interested in other stocks from the same space can consider Health Insurance Innovations, Inc. , Primerica, Inc. (PRI - Free Report) and GWG Holdings, Inc. . While Health Insurance Innovation sports a Zacks Rank #1 (Strong Buy), both GWG Holdings and Primerica hold a Zacks Rank #2 (Buy).
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Genworth Financial Eyes Growth Despite Low Interest Rates
On Sep 5, 2016, we issued an updated research report on Genworth Financial, Inc. (GNW - Free Report) .
Genworth Financial has been concentrating on streamlining and rationalizing its business to improve performance, enhance financial and strategic flexibility, strengthen mortgage insurance, and increase excess capital, earnings and return on equity (ROE). In keeping with its growth plans, Genworth is in the process of separating the long-term care business to restructure the U.S. Life vertical.
Moreover, the mortgage business of the company has been reporting profits in recent times. In fact, the last reported quarter was the eleventh consecutive quarter in which the company made profits after incurring losses over a long period. The upside in the quarter was largely driven by a better performing U.S. Mortgage Insurance.
Further, the life insurer intends to lower its debt level. Genworth deployed a large portion of the LPI sales proceeds to fund the 2016 debt at maturity, which in turn, will lower interest expense by about $25 million in 2016.
Exemplary performance by the mortgage division is helping Genworth receive dividends from its subsidiary. For 2016, Genworth estimates dividends between $100 million and $150 million.
Riding on the operational strength, the Zacks Rank #2 (Buy) life insurer delivered positive surprise in two of the last four quarters.
However, exposure to a low interest rate environment has been adversely affecting the company’s investment results. Given the downward trend of investment results, the company does not expect any immediate turnaround in the near term.
Stocks to Consider
Investors interested in other stocks from the same space can consider Health Insurance Innovations, Inc. , Primerica, Inc. (PRI - Free Report) and GWG Holdings, Inc. . While Health Insurance Innovation sports a Zacks Rank #1 (Strong Buy), both GWG Holdings and Primerica hold a Zacks Rank #2 (Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>