MetLife (MET) Ventures Into Single Family Rental Space in the US
MetLife Inc’s MET asset management business, MetLife Investment Management (“MIM”), announced that it closed the MetLife Single Family Rental Fund, having capital commitments of $390 million. With this fund, MIM aims to develop and acquire single-family and purpose-built rental houses across 75 biggest U.S. markets. This move should aid MetLife in tapping the growing demand for single-rental houses amid high-interest rates. However, shares of MetLife lost 0.3% on Aug 16, replicating a broader decline in markets.
This move bodes well for MetLife’s investment management arm, which had $587.5 billion in assets under management as of Jun 30, 2023. This new venture is an extension of MIM’s experience in making investments in the housing segments, wherein it has served clients well. The company aims to provide renters with well-located units for their use. MIM’s single-family rental fund is the first of its kind closed by the real estate equity team. It has secured capital from a group of global institutional investors.
Rising interest rates have made single-family housing unaffordable for home buyers, shifting them to rental houses. Due to the rising demand for rental houses, rents should grow, benefiting the fund. The demand for the rental housing market remains strong as millennials seek inexpensive alternatives to apartment rentals and homeownership.
Moreover, the company aims to create value by developing assets which are less sensitive to changes in interest rates. However, as the supply of rental stock improves due to government initiatives, the growth in rents might slow down.
Price Performance
Shares of MetLife have gained 9.1% quarter to date compared with the industry’s rise of 2.7%.
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Zacks Rank & Key Picks
MetLife Inc currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the same space are Assurant, Inc. AIZ, Old Republic International ORI and Corebridge Financial, Inc. CRBG. Assurant and Old Republic International presently sport a Zacks Rank #1 (Strong Buy), while Corebridge currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Assurant outpaced estimates in each of the trailing four quarters, the average surprise being 24.4%.
The Zacks Consensus Estimate for AIZ’s 2023 earnings suggests an improvement of 8.5%, while the same for revenues indicates growth of 4.1% from the corresponding year-ago reported figures. The consensus mark for AIZ’s 2023 earnings has moved 8.7% north in the past 30 days.
Old Republic International’s bottom line outpaced estimates in each of the trailing four quarters. The average of earnings surprises is 29.9%. The consensus mark for ORI’s 2023 earnings has moved 8.3% north in the past 30 days.
The bottom line of Corebridge outpaced estimates in each of the trailing four quarters, the average surprise being 14.3%.
The Zacks Consensus Estimate for CRBG’s 2023 earnings suggests an improvement of 45.6%, while the same for revenues indicates growth of 23% from the corresponding year-ago reported figures. The consensus mark for CRBG’s 2023 earnings has moved 3% north in the past 30 days.
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