The recent announcement of the relaxation of capital measures
for insurers in the U.S. has boosted the share price of
). The stock hit a new 52-week high at $54.93 on Jun 4. This global
multi-line insurer's shares rose about 5.4% since the company
reported its first-quarter 2014 results at the end of Apr 2014.
The improved momentum of this Zacks Rank #3 (Hold) stock was
driven by disciplined expense management along with a strong focus
on streamlining operations. The latest five-year credit agreement
further boosts liquidity.
Yesterday's closing price represents a strong one-year return of
about 23.9%, against 18.2% clocked by the S&P 500 index.
Average volume of shares traded over the last three months stands
at approximately 6,333.4K.
On Apr 30, MetLife reported first-quarter 2014 operating
earnings per share of $1.37, underperforming both the Zacks
Consensus Estimate and the year-ago number by 2.1% and 6.8%,
respectively. Operating earnings fell 4% year over year to $1.56
billion. However, MetLife delivered positive earnings surprises in
2 of the last 4 quarters with an average beat of 2.5%.
Results reflected growth across the Americas, Asia and EMEA
(Europe Middle East Africa), higher investment income,
expense control and derivative gains, leading to improved book
value per share and dividend hike. These were partially offset by
declined return on equity (ROE) and higher legal costs.
The U.S. Senate has passed a unanimous bill to ease a provision
in the Dodd-Frank Act, which will now simplify capital rules for
systemically important financial institutions (SIFI) insurers. This
also differentiates these insurance companies from the stricter
capital compliances of traditional banks, thereby aiming to build a
safe financial system. Subsequently, MetLife entered into five-year
credit agreement worth $4 billion, which can be expanded up to $5
Overall, MetLife's long-term growth outlook appears reasonable
amid the regulatory challenges and market risks. The company's
capital position also remains one of the sturdiest in the industry,
and is cushioned by a diversified portfolio mix and a leading
brand. Going forward, the company's efforts to enhance operating
leverage and shareholder return should impress the ratings agencies
Some better-ranked insurers that warrant a look include
OneBeacon Insurance Group Ltd.
Old Republic International Corp.
Hallmark Financial Services Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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METLIFE INC (MET): Free Stock Analysis Report
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