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May 23, 2024 |
MetLife, Inc. (NYSE: MET)$72.87 USD ( As of 05/22/24 ) |
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Data Overview
| 52 Week High-Low | $74.22 - $49.55 |
|---|---|
| 20 Day Average Volume | 3,161,957 |
| Beta | 1.09 |
| Market Cap | 51.82 B |
| Dividend / Div Yld | $2.18 / 2.99% |
| Industry | Insurance - Multi line |
| Industry Rank | 90 / 249 (Top 36%) |
| Current Ratio | 0.16 |
| Debt/Capital | 36.51% |
| Net Margin | 3.50% |
| Price/Book (P/B) | 1.80 |
| Price/Cash Flow (P/CF) | 10.85 |
| Earnings Yield | 11.83% |
| Debt/Equity | 0.58 |
| Value Score |  |
|---|---|
| P/E (F1) | 8.45 |
| P/E (F1) Rel to Industry | -5.78 |
| PEG Ratio | 0.61 |
| P/S (F1) | 0.77 |
| P/S (TTM) | 0.77 |
| P/CFO | 10.85 |
| P/CFO Rel to Industry | 0.41 |
| EV/EBITDA Annual | 21.54 |
| Growth Score |  |
|---|---|
| Proj. EPS Growth (F1/F0) | 17.62% |
| Hist. EPS Growth (Q0/Q-1) | 5.55% |
| Qtr CFO Growth | -9.36 |
| 2 Yr CFO Growth | 1,880.37 |
| Return on Equity (ROE) | 20.39% |
| (NI - CFO) / Total Assets | NA |
| Asset Turnover | 0.10 |
| Momentum Score |  |
|---|---|
| 1 week Volume change | 0.84% |
| 1 week Price Cng Rel to Industry | -0.36% |
| (F1) EPS Est 1 week change | 0.00% |
| (F1) EPS Est 4 week change | -1.03% |
| (F1) EPS Est 12 week change | -2.47% |
| (Q1) EPS Est 1 week change | 0.20% |
Summary
MetLife, Inc.’s first-quarter earnings of $1.36 per share beat the Zacks Consensus Estimate by 16.2% but declined 7% year over year. The quarter benefited from favorable underwriting, volume growth and a favorable impact of the tax reform. MetLife’s shares have underperformed its industry in a year's time. Its efforts to streamline business, only to focus on core business, are really impressive. Its revenues grew in 2017 after declining for two years and the trend is likely to continue in 2018. Its strong international operations and disciplined capital management should drive long-term growth. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 3.1% upward over the last seven days. Nevertheless, exposure to catastrophe losses and investment in efficiency programs will put pressure on margins.
Elements of the Zacks Rank
Agreement Estimate Revisions (60 days)
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67% Q1 (Current Qtr)Revisions: 6 Up: 4 Down: 2 |
83% Q2 (Next Qtr)Revisions: 6 Up: 5 Down: 1 |
86% F1 (Current Year)Revisions: 7 Up: 1 Down: 6 |
83% F2 (Next Year)Revisions: 6 Up: 1 Down: 5 |
Magnitude Consensus Estimate Trend (60 days)
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Upside Zacks Consensus Estimate vs. Most Accurate Estimate
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Surprise Reported Earnings History
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Average 4 Qtr Surprise |
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The data on the front page and all the charts in the report represent market data as of 05/22/24, while the report's text is as of 05/07/2018
Overview
MetLife, Inc. (MET) is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management. MetLife is organized into five segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa (“EMEA”); and MetLife Holdings.
On Aug 4, 2017, MetLife, completed the separation of Brighthouse Financial, Inc. and its subsidiaries (“Brighthouse”) through a distribution of 96,776,670 shares of Brighthouse Financial, Inc. common stock to the MetLife, Inc. common shareholders.
SegmentsThe U.S. segment (51% of revenues in 2017) offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. The U.S. segment is organized into three businesses: Group Benefits, Retirement and Income Solutions and Property & Casualty.
The Asia segment (18%) offers a broad range of products to both individuals and corporations, as well as other institutions and their respective employees, which include whole life, term life, variable life, universal life, accident & health insurance, fixed and variable annuities, credit insurance and endowment products.
The Latin America (8) segment offer products such as life insurance, accident & health insurance, group medical, dental, credit insurance, endowment and retirement and savings products.
The EMEA segment (5) offers a broad range of products which include life insurance, accident & health insurance, credit insurance, annuities, endowment and retirement and savings products.
The MetLife Holdings (18) segment consists of operations relating to products and businesses no longer actively marketed by the company in the United States.
Reasons To Buy:
The company's focus on streamlining its business, its strong international operations and a discplined capital management will drive long term growth.
Revenue Growth Catching Up: Revenues grew 3% in 2017 after declining 4.6% and 9.3% in 2015 and 2016, respectively. The top line was up 0.6% in the first quarter of 2018. Revenues are expected to grow in 2018 on the back of sales growth in Asia and EMEA, rise in operating premiums, fees and other revenues in its Group Benefits segment and an increase in net investment income owing to rising interest rates.
Focus on Exiting High Risk Businesses: The company is busy streamlining its business (for the past many years) to focus on the ones with potential for growth and in fixing or exiting businesses that do not create value. One of the most significant steps taken in this direction was the separation of its U.S. Retail business named Brighthouse Financial, completed recently. This business required MetLife to hold a huge capital buffer and placed it at a significant competitive disadvantage. The move freed MetLife from a capital-intensive business. It also saved the company from exposure to interest rate and equity market volatility related to the exited business. Also, recently, the company closed its UK Wealth Management business which was suffering from low interest rates. Though the exit of these businesses will dent top-line growth to some extent (in the coming quarters) in the form of fees and premium lost, over the long term these strategic steps will transform MetLife into a company with less volatility and more free cash flow, which should lead higher return on equity.
Disciplined Capital Management: MetLife has a strong risk-based capital position, sufficient liquidity and a low debt ratio. The company also manages its capital efficiently. It has been buying back shares which is aiding its bottom line. The company also made it clear that it will keep intact its share buyback plan (in the backdrop of incurring $331 million of reserve charge in its Retirement and Income Solutions business) and has already started buying back shares under its recently approved new share repurchase plan of $2 billion. The company repurchased $1 billion of stock in the first quarter and recently announced a 5% increase in the common stock dividend, exhibiting a commitment to capital return. It also plans to execute the exchange offer for its remaining stake in Brighthouse before the end of 2018. The company’s disciplined capital management strategy instills investors’ confidence in its ability to protect the bottom line in a market environment which provides little scope for top-line growth.
Superior Return on Equity: Further, MetLife’s trailing 12-month return on equity (ROE) reinforces its growth potential. The company’s ROE of 8.7% compares favorably with the ROE of 6.8% for the industry, reflecting its tactical efficiency in using shareholder funds.
Share Price Performance: In a year's time, shares of the company have gained 0.9% against the industry's increase of 2.5%. The stock carries an impressive Value Score of A. Moreover, it is significantly undervalued and is currently trading at a forward 12-month price-to-earnings ratio of 9.1, which compares with the industry P/E ratio of 10.5. Given that the stock is trading at low valuation levels, it provides an attractive investment opportunity. The stock has seen the Zacks Consensus Estimate for current-year earnings being revised 3.1% upward over the last seven days.
Reasons To Sell:
Reserve Charge in Retirement and Income Solutions (RIS) Segment: The company took an after-tax charge of $331 million in its RIS in the fourth quarter of 2017, related to group annuitants whom it could not contact in its second effort. This reflects weakness in the company’s internal control.
Investment in Efficiency Programs: In 2017, the company incurred $102 million on account of expenses associated with its previously announced unit cost initiative. The investments will go toward technology improvements. The company expects initiative costs of roughly $330 million pretax in 2018 and plans to invest $1.0 billion by 2020. The company has set a target to achieve $800 million in pre-tax annual run-rate savings by 2020. These costs will weigh on margins before generating benefits.
Exposure to Catastrophe Loss: In the second half of 2017, hurricanes Irma and Harvey and the California wild fires caused a net loss of $60 million, having impacted the U.S. segment. The company again incurred pre-tax catastrophe losses of $58 million in the first quarter of 2018. MetLife’s property & casualty business will continue to be exposed to weather-related loss, given the nature of these operations.
Last Earnings Report
Quarter Ending 03/2024
| Report Date | May 01, 2024 |
|---|---|
| Sales Surprise | -3.81% |
| EPS Surprise | 0.00% |
| Quarterly EPS | 1.83 |
| Annual EPS (TTM) | 7.67 |
MetLife Q1 Earnings Top Estimates, Revenues Rise Y/Y
MetLife, Inc.’s first-quarter 2018 operating earnings of $1.36 per share beat the Zacks Consensus Estimate of $1.17 by 16.2%. However, the bottom line declined nearly 7% year over year.
The reported quarter benefited from favorable underwriting, volume growth and a favorable positive impact of the tax reform.
The company generated operating revenues of $15.148 billion, up 1% year over year. However, the top line missed the Zacks Consensus Estimate by 3.4%.
Total expenses of $13.15 million declined 5.35% year over year.
Quarterly Segment Details
U.S.
Adjusted earnings in this segment surged 31% year over year to $653 million, attributable to the impact of U.S. tax reform. Adjusted operating premiums, fees & other revenues came in at $5.7 billion, declining 1% year over year.
Asia
Operating earnings of $327 million were up 11% year over year on reported basis, and up 7% on constant currency basis, fueled by volume growth. Operating premiums, fees & other revenues in Asia were up 4% (down 1% on a constant currency basis) to $2.2 billion, driven by transition to fee-based products.
Latin America
Operating earnings were $140 million, down 2% (down 11% at constant currency) year over year. This downside was due to the negative impact of U.S. tax reform as well as a one-time tax item in Chile. Operating premiums, fees & other revenues were $989 million, up 8% on reported and 2% on constant currency basis.
EMEA
Operating earnings from EMEA increased 8% (down 5% on constant currency basis) year over year to $81 million. Operating premiums, fees & other revenues were $679 million, up 11% reportedly and 2%, on constant currency basis.
MetLife Holdings
Operating earnings from MetLife Holdings came in at $425 million, up 10% year over year, attributable to U.S. tax reform. Operating premiums, fees & other revenues were $1.3 billion, down 12%, primarily due to Brighthouse separation-related impacts.
Corporate & Other
Corporate & other incurred an operating loss of $203 million, wider than $76 million loss in the prior-year quarter due to the negative impact of U.S. tax reform.
Financial Update
Variable investment income increased to $212 million from $177 million in the year-ago quarter, driven by lower hedge fund income.
Book value per share decreased 14% year over year to $52.49 as of Mar 31, 2018.
Adjusted tangible return on equity expanded 470 basis points to 16.4%.
Recent News
MetLife And Tencent's WeSure Form Digital Insurance Partnership - Apr 1, 2018
MetLife and WeSure, digital insurance provider owned by Tencent, announced a strategic partnership to offer insurance solutions to travellers through Tencent's WeSure online insurance platform. The partnership's first solution is an aviation accident insurance product which will be provided on the WeSure platform and focus on an optimized customer experience, protection level and price.
Industry Analysis(1)Zacks Industry Rank: NA
Top Peers
| Axa Sa (AXAHY) |
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| M¿nchener R¿ckversicherungs-Gesellschaft (MURGY) |
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| Zurich Insurance Group Ltd. (ZURVY) |
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| Prudential Financial, Inc. (PRU) |
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| Swiss Re Ltd. (SSREY) |
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| American International Group, Inc. (AIG) |
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| Sompo Holdings, Inc. Unsponsored ADR (SMPNY) |
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| The Hartford Financial Services Group, Inc. (HIG) |
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| Corebridge Financial, Inc. (CRBG) |
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Industry Comparison Insurance - Multi Line | Position in Industry: 9 of 39 |
Industry Peers |
| MET |
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|---|---|
| Market Cap | 51.82 B |
| # of Analysts | 7 |
| Dividend Yield | 2.99% |
| Value Score | |
| Cash/Price | 0.66 |
| EV/EBITDA | 21.54 |
| PEG Ratio | 0.61 |
| Price/Book (P/B) | 1.80 |
| Price/Cash Flow (P/CF) | 10.85 |
| P/E (F1) | 8.45 |
| Price/Sales (P/S) | 0.77 |
| Earnings Yield | 11.83% |
| Debt/Equity | 0.58 |
| Cash Flow ($/share) | 6.72 |
| Growth Score | |
| Hist. EPS Growth (3-5 yrs) | 5.55% |
| Proj. EPS Growth (F1/F0) | 17.62% |
| Curr. Cash Flow Growth | -4.84% |
| Hist. Cash Flow Growth (3-5 yrs) | -0.41% |
| Current Ratio | 0.16 |
| Debt/Capital | 36.51% |
| Net Margin | 3.50% |
| Return on Equity | 20.39% |
| Sales/Assets | 0.10 |
| Proj. Sales Growth (F1/F0) | 1.43% |
| Momentum Score | |
| Daily Price Chg | 0.39% |
| 1 Week Price Chg | -0.36% |
| 4 Week Price Chg | 0.21% |
| 12 Week Price Chg | 5.09% |
| 52 Week Price Chg | 45.01% |
| 20 Day Average Volume | 3,161,957 |
| (F1) EPS Est Wkly Chg | 0.00% |
| (F1) EPS Est Mthly Chg | -1.03% |
| (F1) EPS Est Qtrly Chg | -2.47% |
| (Q1) EPS Est Mthly Chg | 0.77% |
| X Industry | S&P 500 |
|---|---|
| 5.27 B | 35.20 B |
| 2 | 18 |
| 1.82% | 1.57% |
| - | - |
| 0.24 | 0.04 |
| 6.32 | 14.90 |
| 0.89 | 2.20 |
| 1.30 | 3.41 |
| 8.98 | 14.00 |
| 9.27 | 18.43 |
| 0.97 | 2.74 |
| 10.41% | 5.40% |
| 0.31 | 0.62 |
| 2.43 | 8.64 |
| - | - |
| 9.80% | 9.87% |
| 13.77% | 7.46% |
| -4.75% | 3.42% |
| 2.43% | 6.81% |
| 0.58 | 1.21 |
| 23.69% | 39.29% |
| 8.22% | 11.99% |
| 14.94% | 16.63% |
| 0.21 | 0.53 |
| 0.71% | 4.11% |
| - | - |
| -0.35% | -0.27% |
| 2.07% | -0.02% |
| 4.84% | 4.64% |
| 7.06% | 4.68% |
| 28.17% | 28.96% |
| 347,773 | 2,112,755 |
| 0.00% | 0.00% |
| 0.00% | 0.15% |
| -0.58% | 0.24% |
| 0.00% | -0.14% |
| AXAHY | MURGY | ZURVY |
|---|---|---|
| 82.41 B | 68.17 B | 75.39 B |
| 1 | ||
| 4.27% | 2.26% | 3.67% |
| | |
| NA | NA | 0.10 |
| NA | NA | 10.54 |
| 1.20 | 0.66 | 0.79 |
| 1.56 | 2.28 | 2.87 |
| 11.41 | 20.17 | 14.49 |
| 9.61 | 9.39 | 12.46 |
| NA | 0.89 | NA |
| 10.41% | 10.65% | 8.02% |
| NA | NA | 0.52 |
| 3.18 | 2.48 | 3.56 |
 |  | |
| NA | NA | NA |
| 5.49% | 47.78% | 39.17% |
| -17.13% | 4.23% | -2.91% |
| -0.78% | 53.54% | 2.43% |
| NA | NA | 22.20 |
| NA | NA | 34.35% |
| NA | 7.05% | NA |
| NA | 20.60% | NA |
| NA | 0.25 | NA |
| 0.00% | NA | 0.00% |
| | |
| -1.41% | -0.24% | -1.02% |
| 0.11% | 2.97% | 2.71% |
| -1.01% | 8.63% | 5.40% |
| 2.66% | 8.63% | -3.70% |
| 24.96% | 40.35% | 10.44% |
| 87,139 | 25,901 | 65,006 |
| 0.53% | 1.14% | 0.24% |
| -0.18% | 23.72% | 0.49% |
| -2.83% | 26.97% | 8.49% |
| NA | NA | NA |
Zacks Stock Rating System
We offer two rating systems that take into account investors' holding horizons; Zacks Rank and Zacks Recommendation. Each provides valuable insights into the future profitability of the stock and can be used separately or in combination with each other depending on your investment style.
Zacks Recommendation
This rating system that has an excellent track record of predicting performance over the next 6 to 12 months. The foundation for the quantitatively determined Zacks Recommendation is trends in the company's estimate revisions and earnings outlook.
The Zacks Recommendation is broken down into 3 Levels; Outperform, Neutral and Underperform. Unlike most Wall Street firms, we have an excellent balance between the number of Outperform and Neutral recommendations.
Our team of 70 analysts are fully versed in the benefits of earnings estimate revisions and how that is harnessed through the Zacks quantitative rating system. But we have given our analysts the ability to override the Zacks Recommendation for the 1200 stocks that they follow. The reason for the analyst over-rides is that there are often factors such as valuation, industry conditions and management effectiveness that a trained investment professional can spot better than a quantitative model.
Zacks Rank
The Zacks Rank is our short-term rating system that is most effective over the one- to three-month holding horizon. The underlying driver for the quantitatively-determined Zacks Rank is the same as the Zacks Recommendation, and reflects trends in earnings estimate revisions.
| Value Score |
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| Growth Score |
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| Momentum Score |
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| VGM Score |
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Zacks Style Score Education
The Zacks Style Score is as a complementary indicator to the Zacks Rank, giving investors a way to focus on the best Zacks Rank stocks that best fit their own stock picking preferences.
Academic research has proven that stocks with the best Growth, Value, and Momentum characteristics outperform the market. The Zacks Style Scores rate stocks on each of these individual styles and assigns a rating of A, B, C, D and F. An A, is better than a B; a B is better than a C; and so on.
As an investor, you want to buy stocks with the highest probability of success. That means buying stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Style Score of an A or a B.
Disclosures
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ZIR uses the following rating system for the securities it covers. Outperform- ZIR expects that the subject company will outperform the broader U.S. equities markets over the next six to twelve months. Neutral- ZIR expects that the company will perform in line with the broader U.S. equities markets over the next six to twelve months. Underperform- ZIR expects the company will underperform the broader U.S. equities markets over the next six to twelve months.
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