Here's Why You Should Buy Globe Life (GL) Stock Right Now
Globe Life Inc. GL has been gaining momentum on the back of higher life and health sales, improved invested assets, increased productivity and agent count, strong liquidity position and effective capital deployment.
Earnings Estimate
The Zacks Consensus Estimate for Globe Life’s 2024 earnings per share (EPS) is pegged at $11.57, indicating an increase of 8.6% on 5.5% higher revenues of $5.82 billion. The Zacks Consensus Estimate for GL’s 2025 EPS is pegged at $12.50, indicating a year-over-year increase of 8%. The consensus estimate for revenues is $6.09 billion, implying an increase of 4.6%.
The expected long-term earnings growth rate is 12.4%, which is better than the industry average of 2.5%.
Northbound Estimate Revision
The Zacks Consensus Estimate for EG’s 2024 and 2025 earnings has moved 1.3% and 1.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Globe Life has a decent surprise history, beating estimates in each of the last four quarters, the average earnings surprise being 2.11%.
Zacks Rank & Price Performance
GL currently carries a Zacks Rank #2 (Buy). Year to date, the stock has gained 4.5% compared with the industry’s growth of 1.6%.
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Return on Equity
Globe Life’s return on equity, a measure reflecting how efficiently a company utilizes shareholders’ money, was 24.3% in the trailing 12 months, which expanded 860 basis points year over year and compares favorably with the industry’s average of 19.8%.
Attractive Valuation
Globe Life’s shares are trading at a price-to-book value multiple of 10.83, lower than the industry average of 12.95. It also has an impressive Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer better returns.
Factors Driving Globe Life
Globe Life has been witnessing a positive trend in revenues, driven by premium growth in its Life Insurance and Health Insurance segments and net investment income.
The strong performance of the American Income and Liberty National divisions should continue to drive the top line in the future. Liberty National should continue to benefit from improved productivity and agent count. GL’s expansion initiatives to capture heavily populated and less penetrated areas should drive growth in the future. Net life sales, as well as net health sales, are expected to grow in the mid-teens for Liberty National.
Moreover, net investment income continues to be another important driver of the company’s top-line growth and has been exhibiting improvement over the last few years. The metric should continue to grow, riding on improved invested assets and higher interest rates on new investments.
The company has maintained a strong liquidity position with sufficient cash-generation capabilities. Its operations consist primarily of writing basic protection life and supplemental health insurance policies, which generate strong and stable cash flows. Globe Life targets a consolidated company action level RBC ratio in the range of 300% to 320%. The company anticipates the RBC ratio for 2023 to be slightly above the middle of the targeted range without any additional capital contributions.
A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. The insurer has continuously been increasing its dividend over the past eight years (2016-2023), witnessing a CAGR of 6.79%.
Other Stocks to Consider
Some other top-ranked stocks from the Financial-Miscellaneous Services space are StoneX Group Inc. SNEX, American Express Company AXP and WisdomTree, Inc. WT, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
StoneX’s earnings surpassed estimates in three of the last four quarters and missed in one, the average surprise being 15.85%. Year to date, shares of SNEX have lost 7.3%.
The Zacks Consensus Estimate for SNEX’s 2024 and 2025 earnings has moved up nearly 5.8% and 0.9%, respectively, in the past 30 days.
American Express’ earnings surpassed estimates in two of the last four quarters and missed in the other two, the average surprise being 1.12%. Year to date, shares of AXP have gained 19.3%.
The Zacks Consensus Estimate for AXP’s 2024 and 2025 earnings implies an increase of 14.3% and 14.6% from the year-ago estimated figure, respectively.
WisdomTree’s earnings surpassed estimates in one of the last four quarters and matched in the other three, the average surprise being 10%. Year to date, shares of WT have gained 19.4%.
The Zacks Consensus Estimate for WT’s 2024 and 2025 earnings implies an increase of 35.1% and 11% from the year-ago estimated figure, respectively.
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