The life insurance industry has witnessed tremendous growth in sales in recent years due to growing consumer awareness of the well-being and well-being of their families. In addition, the return of the benchmark 10-year Treasury bond rose eight basis points to 2.942% this week, its highest yield since 2018. Additionally, interest rates are expected to rise significantly later this year. This bodes well for life insurers, as higher interest rates allow them to generate better returns on their long-term investments that are structured to meet their commitment to policyholders.
Investments in technology to serve today’s sophisticated consumers and simplify underwriting practices are also expected to drive growth in the life insurance industry.
Against this backdrop, we believe that dividend-paying life insurance stocks MetLife, Inc. (MEET) and Manulife Financial Corporation (MFC) could be a great addition to your portfolio.
MetLife, Inc. (MEET)
MET is a financial services company that provides insurance, annuity, employee benefits and asset management services worldwide. The New York-based company has five operating segments: United States; Asia; Latin America; Europe, Middle East, Africa; and MetLife Holdings. The company offers life, dental, group short and long term disability, individual disability, pet insurance, accidental death and dismemberment, vision, accident and health insurance.
MET paid an annual dividend of $0.48 on March 14, 2022. Its annual dividend of $1.92 yields 2.7% on its current share price. It has a four-year average dividend yield of 3.7%. Additionally, the company’s dividend payouts have grown at a CAGR of 6.1% over the past five years.
Last month, MET announced the launch of its new Structured Installment Sales solution, available through its subsidiary, Metropolitan Tower Life Insurance Company. The solution is available in 49 states, Puerto Rico and Washington, DC. Structured installment sales allow individuals to defer their tax liability for sales of qualifying properties, including small business, agricultural, residential and commercial properties.
During the fourth quarter, ending December 31, 2021, MET’s total revenue increased 3.5% year-over-year to $20.09 billion. Its adjusted profit was $1.70 billion, while its adjusted EPS rose 6.9% from its value a year ago at $2.17.
The consensus EPS estimate of $8.09 for its fiscal year 2023 represents a 12% year-over-year improvement. Analysts expect its revenue to grow 0.6% year-over-year to $16.81 billion for the first quarter, ending March 31, 2022. Additionally, it has a impressive track record of earnings surprises; it has exceeded consensus EPS estimates in each of the past four quarters. The stock has gained 14.6% year-to-date and 21.3% over the past nine months.
MET POWR Rankings reflect this promising prospect. The company has an overall rating of B, which translates to Buy in our proprietary rating system. POWR ratings rate stocks on 118 separate factors, each with its own weighting.
The stock also has a B rating for growth, sentiment and momentum. In category B Life insurance industry, it is ranked #2 out of 28 stocks.
To see additional POWR ratings for stability, value, and quality for MET, Click here.
Manulife Financial Corporation (MFC)
With its subsidiaries, MFC in Toronto, Canada, offers financial products and services in Asia, Canada, the United States and internationally. The Company operates through wealth and asset management businesses; Insurance and annuity products; And the Corporate and Other segments.
MFC paid an annual dividend of $0.26 on March 21, 2022. Its annual dividend of $1.04 yields 4.9% on its current share price. It has a four-year average dividend yield of 4.5%. Additionally, the company’s dividend payouts have grown at a CAGR of 10.9% over the past five years.
During the fourth quarter of 2021, MFC’s APE sales increased 5% year-over-year to $1.4 billion. Of the society basic income was $1.7 billion, up 20% at constant currency from the prior year quarter. The company’s basic earnings per share rose 13.5% year over year to $0.84.
Analysts expect MFC’s revenue to grow 19.9% year-over-year to $58.50 billion for its fiscal 2022. The consensus EPS estimate of $0.67 represents a 0.2% year-over-year improvement for the first quarter, ending March 31, 2022. an impressive earnings surprise story; it has exceeded consensus EPS estimates in three of the past four quarters.
Shares of the company have jumped 11.4% year-to-date and 10.1% over the past nine months.
MFC’s strong fundamentals are reflected in its POWR ratings. MFC also earned an A grade for growth and a B for momentum. Within the Life insurance industry, it is ranked #6.
In total, we rate MFC on eight distinct levels. To see MFC’s additional POWR ratings for Growth, Value, Sentiment, Quality and Stability, Click here.
MET shares were trading at $70.15 per share on Friday afternoon, down $1.43 (-2.00%). Year-to-date, the MET has gained 13.04%, compared to a -9.40% rise in the benchmark S&P 500 over the same period.
About the Author: Spandan Khandelwal
Spandan’s is a financial journalist and investment analyst specializing in the stock market. Through its ability to interpret financial data, it aims to help investors assess a company’s fundamentals before investing. After…