China Life Insurance Co. Ltd. and its subsidiaries operating as a life insurance company have been putting up a good performance for the past many quarters. Its strong top and bottom line growth looks impressive.
The company with a Zacks Rank #3 (Hold) flaunts an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
Now, let’s focus on some important points that make China Life’s stock a good option to hold onto.
Increasing Premiums: China Life has been witnessing steady revenue growth for the past few years, mainly backed by the significant premium growth in the company’s Individual Life Insurance business. In the first quarter of 2018, regular premiums in total premiums from long-term insurance of new policies rose by 36.9% year over year.
Additionally, renewal premiums in total premiums increased by 18.7% year over year. Thus, a rising trend in premiums is likely to bolster the company’s revenue growth, going forward.
Price Performance: Quarter to date, shares of the company have lost 0.4%, performing relatively better than the 1.05% decline of the industry it belongs to. Its solid fundamentals are likely to favor the stock moving ahead.
Strong Investment Management: The company has been witnessing a strong investment income since 2014. The investment income of the company came in at $20.6 billion (RMB 129 billion), growing 19.3% year over year. Although the metric decreased in the first quarter, the gradual raise in interest rates should aid net investment income in the coming quarters.
Profitability: China Life’s trailing 12-month return on equity (ROE) of 12.32% compares favorably with the industry’s average of 9.76%. This in turn indicates the company’s efficiency in using the shareholders’ fund.
Stocks to Consider
Some better-ranked players from the Life Insurance Industry are GWG Holdings, Inc (GWGH - Free Report) , American Equity Investment Life Holding Company (AEL - Free Report) and FGL Holdings (FG - Free Report) .
GWG Holdings is a financial services company that purchases life insurance policies in the secondary market of the United States. It sports a Zacks Rank #1 (Strong Buy) and managed to pull off a trailing four-quarter positive surprise of a whopping 185.14%. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Equity Investment Life and its subsidiaries offer life insurance products and services in the United States. With a Zacks Rank #2 (Buy), the company delivered a trailing four-quarter beat of 24.38%.
FGL Holdings provides individual life insurance products and annuities in the United States. It carries a Zacks Rank of 2. The company came up with a four-quarter positive earnings surprise of 12%.
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