We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GL Stock Trading at a Discount to Industry at 8.22X: Time to Hold?
Read MoreHide Full Article
Key Takeaways
Globe Life shares have gained 41.5% in the past year compared with the industry's growth of 24.2%.
GL targets a 300% to 320% consolidated RBC ratio for 2025, supporting financial strength.
The American Income and Liberty National divisions are expected to fuel future top-line growth.
Globe Life Inc. (GL - Free Report) shares are trading at a discount compared with the Zacks Accident and Health Insurance industry. Its forward price-to-earnings multiple of 8.22X is lower than the industry average of 12.27X, the Finance sector’s 16.72X and the Zacks S&P 500 Composite’s 22.52X. The insurer has a Value Score of A.
The insurer has a market capitalization of $9.7 billion. The average volume of shares traded in the last three months was 0.6 million.
Shares of AMERISAFE, Inc. (AMSF - Free Report) , Employers Holdings Inc. (EIG - Free Report) and Aflac Incorporated (AFL - Free Report) are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
Shares of Globe Life closed at $117.60 on Wednesday and are trading above the 200-day simple moving average (SMA) of $116.79, indicating solid upward momentum.
GL is an Outperformer
Shares of Globe Life have surged 41.5% in the past year, outperforming its industry and the Finance sector and the Zacks S&P 500 composite’s growth of 24.2%, 18.8% and 10.1%, respectively.
Image Source: Zacks Investment Research
GL’s Growth Projection Encourages
The Zacks Consensus Estimate for Globe Life’s 2025 earnings per share indicates a year-over-year increase of 9.8%. The consensus estimate for revenues is pegged at $6.04 billion, implying a year-over-year improvement of 4.6%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 10% and 4.7%, respectively, from the corresponding 2025 estimates.
Earnings have grown 13.3% in the past five years, better than the industry average of 5.5%. The accident and health insurer has a solid surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average beat being 3.22%.
Average Target Price for GL Suggests Upside
Based on short-term price targets offered by 11 analysts, the Zacks average price target is $145 per share. The average suggests a potential 19.7% upside from the last closing price.
Image Source: Zacks Investment Research
GL’s Return on Capital
GL’s trailing 12-month return on equity is 21.4%, ahead of the industry average of 15.5%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Also, the return on invested capital (ROIC) in the trailing 12 months was 12.7%, better than the industry average of 7.6%. Its ROIC has been increasing over the last few quarters amid capital investment made over the same time frame. This reflects the company’s efficiency in utilizing funds to generate income.
What's Aiding Globe Life's Performance?
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 drive the top line in the future. Liberty National is likely to 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 is likely to keep growing, riding on improved invested assets and higher interest rates on new investments.
The company has maintained a strong liquidity position with sufficient cash-generation capabilities. Its operations comprise writing basic protection life and supplemental health insurance policies, which generate strong and stable cash flows. For 2025, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%.
A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. The insurer has continuously been increasing its dividend over the past eight years (2017-2024), witnessing a CAGR of 7%.
Conclusion
Globe Life’s higher life and health sales, improved invested assets, increased productivity and agent count, strong liquidity position and effective capital deployment make it an attractive stock.
Globe Life also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Higher return on capital, favorable growth estimates, as well as attractive valuations, should continue to benefit the insurer over the long term. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
GL Stock Trading at a Discount to Industry at 8.22X: Time to Hold?
Key Takeaways
Globe Life Inc. (GL - Free Report) shares are trading at a discount compared with the Zacks Accident and Health Insurance industry. Its forward price-to-earnings multiple of 8.22X is lower than the industry average of 12.27X, the Finance sector’s 16.72X and the Zacks S&P 500 Composite’s 22.52X. The insurer has a Value Score of A.
The insurer has a market capitalization of $9.7 billion. The average volume of shares traded in the last three months was 0.6 million.
Shares of AMERISAFE, Inc. (AMSF - Free Report) , Employers Holdings Inc. (EIG - Free Report) and Aflac Incorporated (AFL - Free Report) are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
Shares of Globe Life closed at $117.60 on Wednesday and are trading above the 200-day simple moving average (SMA) of $116.79, indicating solid upward momentum.
GL is an Outperformer
Shares of Globe Life have surged 41.5% in the past year, outperforming its industry and the Finance sector and the Zacks S&P 500 composite’s growth of 24.2%, 18.8% and 10.1%, respectively.
Image Source: Zacks Investment Research
GL’s Growth Projection Encourages
The Zacks Consensus Estimate for Globe Life’s 2025 earnings per share indicates a year-over-year increase of 9.8%. The consensus estimate for revenues is pegged at $6.04 billion, implying a year-over-year improvement of 4.6%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 10% and 4.7%, respectively, from the corresponding 2025 estimates.
Earnings have grown 13.3% in the past five years, better than the industry average of 5.5%. The accident and health insurer has a solid surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average beat being 3.22%.
Average Target Price for GL Suggests Upside
Based on short-term price targets offered by 11 analysts, the Zacks average price target is $145 per share. The average suggests a potential 19.7% upside from the last closing price.
Image Source: Zacks Investment Research
GL’s Return on Capital
GL’s trailing 12-month return on equity is 21.4%, ahead of the industry average of 15.5%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Also, the return on invested capital (ROIC) in the trailing 12 months was 12.7%, better than the industry average of 7.6%. Its ROIC has been increasing over the last few quarters amid capital investment made over the same time frame. This reflects the company’s efficiency in utilizing funds to generate income.
What's Aiding Globe Life's Performance?
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 drive the top line in the future. Liberty National is likely to 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 is likely to keep growing, riding on improved invested assets and higher interest rates on new investments.
The company has maintained a strong liquidity position with sufficient cash-generation capabilities. Its operations comprise writing basic protection life and supplemental health insurance policies, which generate strong and stable cash flows. For 2025, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%.
A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. The insurer has continuously been increasing its dividend over the past eight years (2017-2024), witnessing a CAGR of 7%.
Conclusion
Globe Life’s higher life and health sales, improved invested assets, increased productivity and agent count, strong liquidity position and effective capital deployment make it an attractive stock.
Globe Life also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Higher return on capital, favorable growth estimates, as well as attractive valuations, should continue to benefit the insurer over the long term. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.