Why Investors Should Retain Brighthouse Financial (BHF) Stock
Brighthouse Financial, Inc. BHF has been favored by investors on the back of 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 2024 earnings is pegged at $17.41 per share, indicating a 12.4% increase from the year-ago reported figure on 3.1% higher revenues of $8.63 billion.
Earnings Surprise History
The life insurer has a solid record of beating earnings estimates in three of the last four quarters, while missing in one, the average beat being 23.18%.
Zacks Rank & Price Performance
Brighthouse Financial currently carries a Zacks Rank #3 (Hold). In the past six months, the stock has gained 5.1% compared with the industry’s rise of 7.2%.
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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 is well-poised for growth, with solid performances by the Annuities and Life segments.
BHF remained focused on enhancing its 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 retirement plans 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 is being well-received in the market. BHF has been 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 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 past few quarters. Riding on asset growth, higher interest rates, a well-diversified and high-quality portfolio, and a 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 the 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 has $104 million remaining under its authorization.
Stocks to Consider
Some better-ranked stocks from the life insurance industry are Reinsurance Group of America RGA, Manulife Financial Corp. MFC and Primerica, Inc. PRI. While Reinsurance Group sports a Zacks Rank #1 (Strong Buy), Manulife 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.
Reinsurance Group beat estimates in three of the last four quarters and missed in one, the average being 18.81%. Over the past six months, shares of RGA have gained 18.3%.
The Zacks Consensus Estimate for RGA’s 2024 earnings per share has moved up 0.6% in the past 60 days.
Manulife Financial has a solid track record of beating earnings estimates in each of the last four quarters, the average being 6.66%. Over the past six months, shares of MFC have risen 10.9%.
The Zacks Consensus Estimate for MFC’s 2024 earnings per share is pegged at $2.65, indicating a year-over-year increase of 8.2%.
Primerica has a solid track record of beating earnings estimates in each of the last four quarters, the average being 7.84%. Over the past six months, shares of PRI have gained 6.2%.
The Zacks Consensus Estimate for PRI’s 2024 earnings per share is pegged at $17.67, indicating an increase of 10.3% year over year.
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Manulife Financial Corp (MFC) : Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
Primerica, Inc. (PRI) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
