Here's Why You Should Hold Brighthouse Financial (BHF) Now
Brighthouse Financial, Inc. BHF has been gaining momentum on the back of the sales of life insurance products, higher Annuity sales, conservative investment strategy, asset growth, higher interest rates, a well-diversified and high-quality portfolio and sufficient liquidity.
Growth Projections
The Zacks Consensus Estimate for Brighthouse Financial’s 2023 earnings is pegged at $15.27 per share, indicating a 39.7% increase from the year-ago reported figure on 2.7% higher revenues of $8.47 billion.
The consensus estimate for 2024 earnings is pegged at $17.48 per share, indicating a 14.5% increase from the year-ago reported figure on 3.3% higher revenues of $8.75 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings has moved 0.6% and 1% north, respectively, in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
The life insurer has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 23.18%.
Zacks Rank & Price Performance
Brighthouse Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 6.8% against the industry’s rise of 9.5%.
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Return on Equity
BHF’s return on equity for the trailing 12 months of 20.8% expanded 1,130 basis points year over year and compared favorably with the industry average of 14.7%. This reflects its efficiency in utilizing its shareholders’ funds.
Business Tailwinds
Brighthouse Financial remains well-poised for growth with solid performances by the Annuities and Life segments.
BHF remained focused on enhancing the product portfolio with the launch of Shield Level Pay Plus, which is an addition to the suite of Shield Annuities. In May 2023, the insurer enhanced the Shield Level Annuities product suite, including the launch of Shield options with Step Rate Edge, to help clients keep their plans for retirement on track by providing additional growth opportunities in certain down markets.
The company launched Shield Level Pay Plus in 2022, which is an income solution and being well-received in the market. BHF remains focused on offering a portfolio of products that help meet the evolving needs of clients.
Brighthouse Financial is one of the largest providers of life insurance products in the United States. Given the company’s expansive and compelling suite of life products, BHF should benefit from the growing individual insurance market. The insurer remains focused on ramping up the new sales of life insurance products and expanding its distribution network, aiming to become a premier player in the industry.
Net investment income has been exhibiting an improving trend over the last few quarters. Riding on asset growth, higher interest rates, a well-diversified and high-quality portfolio as well as conservative investment strategy, the insurer expects the metric to improve in the future.
Brighthouse Financial’s liquidity position remains robust with more than $900 million of cash and liquid assets at the holding company as of the end of the third quarter. BHF exited the third quarter of 2023 with a combined risk-based capital ratio between 400% and 420%.
Given enhanced financial strength and flexibility, the company remains committed to returning capital to shareholders and intends to maintain an opportunistic share repurchase program to create significant value for stockholders. At present, BHF had $104 million remaining under its authorization.
Stocks to Consider
Some better-ranked stocks from the life insurance industry are American Equity Investment Life Holding Company AEL, Primerica, Inc. PRI and GoHealth, Inc. GOCO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Equity has a solid track record of beating earnings estimates in two of the last four quarters and missing in the other two, the average being 13.53%. In the past year, AEL’s shares have gained 46.8%.
The Zacks Consensus Estimate for AEL’s 2023 and 2024 earnings per share indicates a year-over-year increase of 86.9% and 2.1%, respectively.
Primerica has a solid track record of beating earnings estimates in each of the last four quarters, the average being 7.84%. In the past year, PRI’s shares have gained 50.1%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates a year-over-year increase of 39.8% and 9.5%, respectively.
The Zacks Consensus Estimate for GoHealth’s 2023 and 2024 earnings per share indicates a year-over-year increase of 77.8% and 40.9%, respectively. In the past year, GOCO’s shares have surged 89.1%.
The Zacks Consensus Estimate for GOCO’s 2023 and 2024 revenues indicates a year-over-year increase of 29.9% and 8.5%, respectively.
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American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report
Primerica, Inc. (PRI) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
GoHealth, Inc. (GOCO) : Free Stock Analysis Report
