The financial sector showed some life on Tuesday and actually led the market higher despites worries about Europe. Equities in the financial sector aren’t close to recovering the losses that they incurred over the summer. One stock in the sector that looks good and is very reasonably priced is Metlife (NYSE:MET).
MetLife, Inc., through its subsidiaries, provides insurance, annuities, and employee benefit programs primarily in the United States, Japan, Latin America, the Asia Pacific, Europe, and the Middle East. The company offers group life insurance products, including variable, universal, term, and whole life products, as well as employee paid supplemental life products; and individual life insurance products comprising variable, universal, term, and whole life products, as well as a range of mutual funds and other securities products. (Business description from Yahoo Finance)
8 reasons Metlife is a solid buy at $34 a share:
- Metlife has beat earnings estimates for each of the last four quarters. The average beat over consensus has been 7% over that time period.
- MET has an A- rated balance sheet and yields 2.1%.
- Metlife is selling at less than .7 times book value.
- MET is priced at just 5 times operating cash flow and has a five year projected PEG of under .7.
- Metlife will be a major beneficiary when interest rates rise, which eventually they must do.
- MET is priced at just 6.3 times forward earnings which is an over 30% discount to its five year average.
- S&P projects Metlife will grow earnings at a 16% annual clip over the next three years. Pretty impressive for a stock selling at 7 times this year’s projected earnings.
- It is selling under analysts’ price targets. Credit Suisse has a $44 price target on MET and the mean analysts’ price target on Metlife is $46.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MET over the next 72 hours.