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MetLife, Inc. Message Board

  • rockyrococco rockyrococco Jul 18, 2013 2:40 AM Flag

    What happens when MET is "Systemically Important"?

    The FSOC seems poised to declare MetLife "Systemically Important" to the economy, meaning more regulation. What will this mean for the stock price, costs of business, and dividend? Prudential was just given this designation, so I think we will be too regardless of the CEOs objection.

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    • The bottom line is it will be bad for the stock price. I have a smallish position it MET and will buy more if it gets declared Systemically important. Once the government gets its claws into you it will be pretty hard to run a business without approval for everything. The designation is totally undeserved but I believe there is a good chance they will get that designation. Expect dividends will be scrutinized. Reserves will be scrutinized and their placement of investments will be scrutinized. Certainly this will impact earnings and payouts in a negative way.

      Sentiment: Hold

    • Bottom-line - any drop would be small and short lived - look at PRU's chart - couldn't even tell that a story even existed - MET will be fine either way - may have a chance to buy on what a 2% drop? Shake off the weak sisters - smart money buying this stock through $70+. Interest rates will rise and MET has lots $ to buyback and increase div. This is a multi-year hold and should be a core holding for anyone creating a portfolio of individual stock selections.

      Sentiment: Strong Buy

    • I sold today. I decided that my 300% profit plus collected dividend since 1999 was enough under this situation. Whether the CEO likes it or not, it does look likely that Met is destined to be designated as "Systemically Important". It is a world wide political thrust that won't go away soon. Profits are going to be hurt by regulations for larger capital requirements, especially in this continuing low interest environment. The business may shift gears and there could be costs from reorganization. There will be some increase in business cost due to dealing with the government and compliance. Some of the costs could be passed on to new policy holders but competition will dictate how much. The dividend won't be raised as fast and could be stuck at this level for some time. Stock price would be hit because of downward future profit forecasts. How much? Your guess is as good as mine.

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