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Why Insurer Metlife Could Be A Buy

MetLife is one of the oldest and most enduring companies in America, drawing its origins to 1863 in New York City. 

Over the past 16 decades it has grown from a simple provider of life insurance and annuities (60%) to a financial colossus that extends to employee benefits and asset management products and services.

From its famous Park Avenue location, MET reaches 90 million customers. This includes over 60 countries in Asia, Latin America, Europe and the Middle East that adds to nearly 30% of its business.

The insurance and financial services industry is highly competitive in all respects. Great importance is placed on attracting new retail and corporate customers since longevity is a key to success in the main insurance and annuity segments of MET's business.

At the same time, adequate reserves must be maintained to meet eventual policy payments to beneficiaries. MET earns its income making actuarial assumptions and earning an interest spread in the interim.

Low interest rates combined with historically narrow interest spreads have disrupted fixed income markets for the past several years. As long-term fixed income investments have matured, insurance companies have been hard pressed to reinvest these proceeds as profitably.

For MET this has caused the company to alter actuarial assumptions and change reserve practices that was announced with the most recent quarterly performance. During this period, the company's revenues fell by 2% to $17 billion and per share profits by 93% to $0.06.

MET has paid dividends either to policyholders or stockholders for more than 90 years with regular increases over the past four. Yes, the financial industry is going through difficult times but it is not the first.

During the financial crisis in 2008, MET revenues increased 8% while per share profits posted negative growth of 24%. The company consistently paid dividends during this period. This means that MET could be less sensitive to bear market pressures than the average company.

The payout ratio is just 41% of earnings-per-share and only 13% of free cash flow. This is unusually low even for insurance companies that are required to maintain adequate reserves for policyholder payments.

MET's balance sheet is not particularly leveraged, and profitability margins are above average. Operating margins at 10.7% are the highest in nearly five years as are the 6% return on invested capital and 8% return on equity.

MET stock has seriously under performed the general market, driving up the $1.60 per share payout to a well above average 3.9% yield.

Over the past decade, dividends have compounded at an 11% average annual rate and by 14.9% over the past five years. If the company can continue to grow dividends and the stock price recovers, MET could offer investors attractive total returns.

Here is a corporate profil and the dividend history of the stock...

Metlife -- Yield: 3.96%

Metlife (NYSE:MET) employs 69,000 people, generates revenue of $70,041.00 million and has a net income of $5,322.00 million. The current market capitalization stands at $45.27 billion.

Metlife’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9,199.00 million. The EBITDA margin is 13.13% (the operating margin is 12.39% and the net profit margin 7.60%).

Financials: The total debt represents 6.63% of Metlife assets and the total debt in relation to the equity amounts to 85.63%. Due to the financial situation, a return on equity of 7.36% was realized by Metlife.

Twelve trailing months earnings per share reached a value of $3.80. Last fiscal year, Metlife paid $1.48 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.75, the P/S ratio is 0.63 and the P/B ratio is finally 0.65. The dividend yield amounts to 3.96%.

Stock Charts:


Long-Term Stock Price Chart of Metlife (MET)
Long-Term Stock Price Chart of Metlife (MET)
Long-Term Dividend Payment History of Metlife (MET)
Long-Term Dividend Payment History of Metlife (MET)
Long-Term Dividend Yield History of Metlife (MET)
Long-Term Dividend Yield History of Metlife (MET)


Check out Metlife's competitiors and their long-term dividend history...


AEGON -- Yield: 7.50%

AEGON (NYSE:AEG) employs 30,000 people, generates revenue of $39,592.30 million and has a net income of $702.15 million. The current market capitalization stands at $8.70 billion.

AEGON’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,908.27 million. The EBITDA margin is 9.87% (the operating margin is 1.73% and the net profit margin 1.77%).

Financials: The total debt represents 3.21% of AEGON assets and the total debt in relation to the equity amounts to 50.45%. Due to the financial situation, a return on equity of 1.75% was realized by AEGON.

Twelve trailing months earnings per share reached a value of $-0.89. Last fiscal year, AEGON paid $0.28 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is not calculable, the P/S ratio is 0.21 and the P/B ratio is finally 0.28. The dividend yield amounts to 7.50%.

Stock Charts:


Long-Term Stock Price Chart of AEGON (AEG)
Long-Term Stock Price Chart of AEGON (AEG)
Long-Term Dividend Payment History of AEGON (AEG)
Long-Term Dividend Payment History of AEGON (AEG)
Long-Term Dividend Yield History of AEGON (AEG)
Long-Term Dividend Yield History of AEGON (AEG)



Manulife Financial -- Yield: 4.23%

Manulife Financial (NYSE:MFC) employs people, generates revenue of $26,752.14 million and has a net income of $1,779.33 million. The current market capitalization stands at $26.73 billion.

Manulife Financial’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,340.33 million. The EBITDA margin is 12.49% (the operating margin is 10.80% and the net profit margin 6.65%).

Financials: The total debt represents 1.36% of Manulife Financial assets and the total debt in relation to the equity amounts to 23.09%. Due to the financial situation, a return on equity of 5.98% was realized by Manulife Financial.

Twelve trailing months earnings per share reached a value of $0.98. Last fiscal year, Manulife Financial paid $0.52 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.83, the P/S ratio is 0.99 and the P/B ratio is finally 0.89. The dividend yield amounts to 4.23%.

Stock Charts:


Long-Term Stock Price Chart of Manulife Financial (MFC)
Long-Term Stock Price Chart of Manulife Financial (MFC)
Long-Term Dividend Payment History of Manulife Financial (MFC)
Long-Term Dividend Payment History of Manulife Financial (MFC)
Long-Term Dividend Yield History of Manulife Financial (MFC)
Long-Term Dividend Yield History of Manulife Financial (MFC)



Prudential -- Yield: 3.83%

Prudential (NYSE:PUK) employs 25,512 people, generates revenue of $54,001.93 million and has a net income of $3,371.77 million. The current market capitalization stands at $46.84 billion.

Prudential’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8,722.94 million. The EBITDA margin is 16.15% (the operating margin is 7.91% and the net profit margin 6.24%).

Financials: The total debt represents 2.15% of Prudential assets and the total debt in relation to the equity amounts to 64.09%. Due to the financial situation, a return on equity of 20.83% was realized by Prudential.

Twelve trailing months earnings per share reached a value of $1.89. Last fiscal year, Prudential paid $1.01 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.15, the P/S ratio is 0.87 and the P/B ratio is finally 2.76. The dividend yield amounts to 3.83%.

Stock Charts:


Long-Term Stock Price Chart of Prudential (PUK)
Long-Term Stock Price Chart of Prudential (PUK)
Long-Term Dividend Payment History of Prudential (PUK)
Long-Term Dividend Payment History of Prudential (PUK)
Long-Term Dividend Yield History of Prudential (PUK)
Long-Term Dividend Yield History of Prudential (PUK)



American International Group -- Yield: 2.17%

American International Group (NYSE:AIG) employs 66,400 people, generates revenue of $58,918.00 million and has a net income of $2,222.00 million. The current market capitalization stands at $63.10 billion.

American International Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $15,785.00 million. The EBITDA margin is 26.79% (the operating margin is 7.76% and the net profit margin 3.77%).

Financials: The total debt represents 5.89% of American International Group assets and the total debt in relation to the equity amounts to 32.62%. Due to the financial situation, a return on equity of 2.23% was realized by American International Group.

Twelve trailing months earnings per share reached a value of $-0.05. Last fiscal year, American International Group paid $0.81 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is not calculable, the P/S ratio is 1.07 and the P/B ratio is finally 0.78. The dividend yield amounts to 2.17%.

Stock Charts:


Long-Term Stock Price Chart of American International Group (AIG)
Long-Term Stock Price Chart of American International Group (AIG)
Long-Term Dividend Payment History of American International Group (AIG)
Long-Term Dividend Payment History of American International Group (AIG)
Long-Term Dividend Yield History of American International Group (AIG)
Long-Term Dividend Yield History of American International Group (AIG)



ING Groep -- Yield: 6.22%

ING Groep (NYSE:ING) employs 51,833 people, generates revenue of $52,458.66 million and has a net income of $5,135.90 million. The current market capitalization stands at $48.21 billion.

ING Groep’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $41,387.32 million. The EBITDA margin is 203.73% (the operating margin is 34.41% and the net profit margin 25.28%).

Financials: The total debt represents 13.70% of ING Groep assets and the total debt in relation to the equity amounts to 287.88%. Due to the financial situation, a return on equity of 9.01% was realized by ING Groep.

Twelve trailing months earnings per share reached a value of $1.14. Last fiscal year, ING Groep paid $0.74 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.63, the P/S ratio is 2.26 and the P/B ratio is finally 0.85. The dividend yield amounts to 6.22%.

Stock Charts:


Long-Term Stock Price Chart of ING Groep (ING)
Long-Term Stock Price Chart of ING Groep (ING)
Long-Term Dividend Payment History of ING Groep (ING)
Long-Term Dividend Payment History of ING Groep (ING)
Long-Term Dividend Yield History of ING Groep (ING)
Long-Term Dividend Yield History of ING Groep (ING)



Lincoln National -- Yield: 2.18%

Lincoln National (NYSE:LNC) employs 9,312 people, generates revenue of $13,682.00 million and has a net income of $1,154.00 million. The current market capitalization stands at $10.75 billion.

Lincoln National’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,817.00 million. The EBITDA margin is 13.28% (the operating margin is 12.67% and the net profit margin 8.43%).

Financials: The total debt represents 2.20% of Lincoln National assets and the total debt in relation to the equity amounts to 40.78%. Due to the financial situation, a return on equity of 7.86% was realized by Lincoln National.

Twelve trailing months earnings per share reached a value of $4.23. Last fiscal year, Lincoln National paid $0.85 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.85, the P/S ratio is 0.78 and the P/B ratio is finally 0.82. The dividend yield amounts to 2.18%.

Stock Charts:


Long-Term Stock Price Chart of Lincoln National (LNC)
Long-Term Stock Price Chart of Lincoln National (LNC)
Long-Term Dividend Payment History of Lincoln National (LNC)
Long-Term Dividend Payment History of Lincoln National (LNC)
Long-Term Dividend Yield History of Lincoln National (LNC)
Long-Term Dividend Yield History of Lincoln National (LNC)

1 comment:

  1. MetLife is a really great company. I worked for a private firm in Florida that sold them software to interface with their mainframes and large printers. So I worked directly with their IT staff. Thanks for the posting.

    ReplyDelete

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