Reasons Why You Should Retain Voya Financial (VOYA) Stock Now
Voya Financial, Inc. VOYA is well-poised for growth, driven by strategic acquisitions, higher underwriting results, improved investment income, stronger surplus income, lower credited interest and sufficient liquidity.
Growth Projections
The Zacks Consensus Estimate for Voya Financial’s 2023 earnings is pegged at $7.94 per share, indicating a 4.7% increase from the year-ago reported figure on 64.29% higher revenues of $1.91 billion.
The consensus estimate for 2024 earnings is pegged at $9.02 per share, indicating a 13.5% increase from the year-ago reported figure on 4.2% higher revenues of $1.99 billion.
Earnings Surprise History
Voya Financial has a solid earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average being 34.36%.
Zacks Rank & Price Performance
VOYA currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 9.3%, outperforming the industry’s rise of 6.8%.
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Return on Equity
The life insurer’s trailing 12-month return on equity was 16.6%, which compared favorably with the industry average of 13%. The figure reflects its efficiency in utilizing its shareholders’ funds.
Business Tailwinds
VOYA’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 the company’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, improved investment income, weaker fee-based margin, a favorable change in deferred acquisition costs and value of business acquired and lower administrative expenses. In Wealth Solutions, full-service recurring deposits should continue to gain from growth in corporate markets.
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. As of Jun 30, 2023, the estimated combined risk-based capital ratio, with adjustments for certain intercompany transactions, was 405%. VOYA’s organic capital generation demonstrates the high free cash flow generation of businesses. This financial flexibility provides strength to the insurer.
Operational excellence has been helping the company deploy capital for enhancing shareholders’ value. Increasing the dividend continues to reflect its confidence in the stability of cash flows at more than 90% free cash flow conversion and will help broaden the insurer’s investor base.
Stocks to Consider
Some better-ranked stocks from the life-insurance industry are NN Group NV Unsponsored ADR NNGRY, Brighthouse Financial, Inc. BHF and Primerica, Inc. PRI. While NN Group NV sports a Zacks Rank #1 (Strong Buy), Brighthouse Financial and Primerica carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NN Group NV’s 2023 and 2024 earnings per share is pegged at $2.73 and $3.90, indicating an increase of 268.9% and 42.8% year over year, respectively.
The Zacks Consensus Estimate for NNGRY’s 2023 and 2024 earnings has moved 50% and 40.2% north, respectively, in the past 30 days. Year to date, the insurer has gained 21.3%.
The Zacks Consensus Estimate for Brighthouse Financial’s 2023 and 2024 earnings per share is pegged at $15.27 and $17.49, indicating an increase of 39.7% and 14.5% year over year, respectively.
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings has moved 0.6% and 1.09% north, respectively, in the past 30 days. Year to date, the insurer has gained 6.4%.
Primerica has a decent track record of beating earnings in each of the last four quarters, the average beat being 6.46%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings per share is pegged at $15.7 and $17.4, indicating an increase of 37.2% and 10.8% year over year, respectively. Year to date, the insurer has rallied 44.3%.
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Primerica, Inc. (PRI) : Free Stock Analysis Report
Voya Financial, Inc. (VOYA) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
NN Group NV Unsponsored ADR (NNGRY) : Free Stock Analysis Report
