We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
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.
Voya Financial Banks on Strong Premiums & Capital Strength
Read MoreHide Full Article
Voya Financial, Inc. (VOYA - Free Report) is currently riding on high premiums and strong net investment income, which, in turn, is boosting its top-line growth.
The company has a decent surprise history, having surpassed earnings estimates in two of the trailing four quarters, the average beat being 0.6%.
Factors Driving Voya Financial
Premiums and net investment income contribute a major portion to the life insurer’s top-line growth. While premiums moved up 6.6% in 2019, net investment income improved 4.6% over the same time frame. On the basis of strength across both revenue components, the top line registered an increase of 4.4% in 2019. However, the current low interest rate environment in the U.S. economy is likely to keep investment yields under pressure, which would consequently weigh on its overall investment income.
Voya Financial primarily reports under the following segments — Retirement, Investment Management and Employee Benefits. Strong demand for products and services offered by the segments has continued to aid top-line growth of the life insurer as well. While Retirement segment is driven by solid momentum in higher equity markets and business; Investment Management banks on improved external client net flows and strong performance fees. Also, its Employee Benefits segment seems to gain from the high demand for its product portfolio mainly offered by its Voluntary business.
Furthermore, Voya Financial flaunts a robust capital position on which it returns value to shareholders in forms of share buybacks and dividend hikes. Last August, the company raised its quarterly dividend by 1400% to 15 cents per share. Evidently, its dividend payments have witnessed a CAGR of 71.9% in the past five years (2014-2019).
Also, the company’s decision to divest its non-performing Individual Life business and other non-retirement annuities businesses bodes well. Though Voya Financial has been witnessing an increase in financial leverage for the past few years, its debt levels have reduced by nearly 3% in 2019. Based on reduced debt levels, the company’s interest expenses have declined 20.4% in the same time frame.
Shares of this Zacks Rank #3 (Hold) company have lost 17.7% in a year, narrower than the industry’s decline of 26.1%.
Nevertheless, we believe that its strong fundamentals are likely to drive its shares going forward.
Stocks to Consider
Some better-ranked stocks in the insurance space are AXIS Capital Holdings Ltd. (AXS - Free Report) , First American Financial Corp. (FAF - Free Report) and Cincinnati Financial Corp. (CINF - Free Report) . While First American Financial currently sports a Zacks Rank #1 (Strong Buy), AXIS Capital and Cincinnati carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AXIS Capital, First American Financial and Cincinnati surpassed estimates in the last reported quarter by 150%, 33.33% and 10.81%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Voya Financial Banks on Strong Premiums & Capital Strength
Voya Financial, Inc. (VOYA - Free Report) is currently riding on high premiums and strong net investment income, which, in turn, is boosting its top-line growth.
The company has a decent surprise history, having surpassed earnings estimates in two of the trailing four quarters, the average beat being 0.6%.
Factors Driving Voya Financial
Premiums and net investment income contribute a major portion to the life insurer’s top-line growth. While premiums moved up 6.6% in 2019, net investment income improved 4.6% over the same time frame. On the basis of strength across both revenue components, the top line registered an increase of 4.4% in 2019. However, the current low interest rate environment in the U.S. economy is likely to keep investment yields under pressure, which would consequently weigh on its overall investment income.
Voya Financial primarily reports under the following segments — Retirement, Investment Management and Employee Benefits. Strong demand for products and services offered by the segments has continued to aid top-line growth of the life insurer as well. While Retirement segment is driven by solid momentum in higher equity markets and business; Investment Management banks on improved external client net flows and strong performance fees. Also, its Employee Benefits segment seems to gain from the high demand for its product portfolio mainly offered by its Voluntary business.
Furthermore, Voya Financial flaunts a robust capital position on which it returns value to shareholders in forms of share buybacks and dividend hikes. Last August, the company raised its quarterly dividend by 1400% to 15 cents per share. Evidently, its dividend payments have witnessed a CAGR of 71.9% in the past five years (2014-2019).
Also, the company’s decision to divest its non-performing Individual Life business and other non-retirement annuities businesses bodes well. Though Voya Financial has been witnessing an increase in financial leverage for the past few years, its debt levels have reduced by nearly 3% in 2019. Based on reduced debt levels, the company’s interest expenses have declined 20.4% in the same time frame.
Shares of this Zacks Rank #3 (Hold) company have lost 17.7% in a year, narrower than the industry’s decline of 26.1%.
Nevertheless, we believe that its strong fundamentals are likely to drive its shares going forward.
Stocks to Consider
Some better-ranked stocks in the insurance space are AXIS Capital Holdings Ltd. (AXS - Free Report) , First American Financial Corp. (FAF - Free Report) and Cincinnati Financial Corp. (CINF - Free Report) . While First American Financial currently sports a Zacks Rank #1 (Strong Buy), AXIS Capital and Cincinnati carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AXIS Capital, First American Financial and Cincinnati surpassed estimates in the last reported quarter by 150%, 33.33% and 10.81%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>