Reasons Why Investors Should Retain Voya Financial (VOYA)
Voya Financial, Inc.’s VOYA higher investment income, lower fee-based margin, favorable change in deferred acquisition costs and value of business acquired (DAC/VOBA) and prudent capital deployment make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for Voya Financial’s 2023 earnings is pegged at $7.88 per share, indicating a 3.9% increase from the year-ago reported figure on 6.9% higher revenues of $1.24 billion.
The consensus estimate for 2024 earnings is pegged at $9.16 per share, indicating a 16.2% increase from the year-ago reported figure on 5.8% higher revenues of $1.31 billion.
Earnings Surprise History
Voya Financial has a decent surprise record. Its earnings beat estimates in five of the last seven quarters and missed in the other two.
Zacks Rank & Price Performance
VOYA currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 17.5%, outperforming the industry’s rise of 9%.
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Return on Equity
The company’s trailing 12-month return on equity was 14.8%, which compares favorably with the industry average of 12.3%. The figure reflects its efficiency in utilizing its shareholders’ funds.
Business Tailwinds
Voya Financial’s earnings are driven by its solid segmental performances across Wealth Solutions, Investment Management and Health Solutions.
These businesses are higher-growth, higher-return and capital-light units, boasting VOYA’s solid presence in the market.
The Wealth Solutions segment is steadily witnessing significant growth on the back of continued strength in underlying business results, higher surplus income, lower credited interest, higher investment income, lower fee-based margin, a favorable change in DAC/VOBA and lower administrative expenses.
The Investment Management segment should gain from higher investment capital returns owing to its overall market performance and improved fee revenues, driven by higher average equity markets and positive net flows.
VOYA is constantly taking strategic steps to ramp up growth in its Investment Management segment. Voya Financial and Allianz Global Investors have inked a long-term strategic partnership that has added scale and diversification to Voya Investment Management. The transaction is expected to be accretive to the company’s adjusted operating earnings per share, which is estimated at 6-8% for 2023. In addition, Voya IM’s adjusted operating margin is expected to increase in the range of 29-31% in 2023 and 30-32% in 2024.
The Health Solutions segment of Voya Financial is likely to benefit from growth across all product lines, higher underwriting results, improved investment income and lower net expenses.
The company’s capital levels remain strong. Its organic capital generation demonstrates the high free cash flow generation of businesses. The life insurer also ended the said period with cash and cash equivalents of $724 million. This financial flexibility provides strength to the insurer.
VOYA expects to resume share repurchases in the second quarter of 2023, assuming macro conditions to remain constructive. Solid capital generation should aid the company to resume share repurchase activity in the second quarter and target a dividend increase in the second half of 2023.
Stocks to Consider
Some better-ranked stocks from the life-insurance industry are Manulife Financial Corp MFC, Primerica, Inc. PRI and GoHealth, Inc. GOCO.
Manulife Financial has a decent track record of beating earnings surprise in three of the last four quarters, while missing once, the average beat being 1.6%. MFC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $2.44 and $2.61, indicating an increase of 2.5% and 7.2% year over year, respectively. In the past year, MFC’s shares have gained 6.6%.
Primerica’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters, while missing in one. PRI carries a Zacks Rank #2 at present.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share indicates a year-over-year increase of 34% and 11.5%, respectively. In the past year, PRI’s shares have gained 62.8%.
GoHealth’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and missed the other two. Currently, GOCO carries a Zacks Rank #2.
The Zacks Consensus Estimate for GOCO’s 2023 and 2024 earnings per share indicates a year-over-year increase of 73.1% and 12.2%, respectively. In the past year, GOCO’s shares have surged 115.2%.
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Manulife Financial Corp (MFC) : Free Stock Analysis Report
Primerica, Inc. (PRI) : Free Stock Analysis Report
Voya Financial, Inc. (VOYA) : Free Stock Analysis Report
GoHealth, Inc. (GOCO) : Free Stock Analysis Report
