MetLife: Q4 And Full-Year 2015 Results Create A Buying Opportunity

Feb. 12, 2016 9:08 AM ETMetLife, Inc. (MET)4 Comments
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WG Investment Research


  • The company reported poor Q4 and Full-Year 2015 results.
  • The company is operating in a challenging operating environment, and other insurers are experiencing similar headwinds.
  • The company is attractively valued based on several different metrics.

On February, 3, 2016, MetLife (NYSE:MET) reported Q4 and Full-Year 2015 results that greatly contributed to shares being down over 5% on the next trading day (full disclosure: the broader market sell-off was also in play). The company reported adjusted EPS of $1.23 for Q4 2015, which missed the consensus EPS estimate of $1.36 by ~10%. In addition, MetLife missed top-line estimates by reporting Q4 2015 revenue of $17.11b versus the consensus estimate of $17.45b.

For comparison purposes, MetLife reported Q4 2014 adjusted EPS of $1.38 on revenue of $18.24b. Similar to the other large insurers, the 2015 results were negatively impacted by several significant headwinds. Therefore, the YoY declines in both the top- and bottom-lines are worrisome if you do not take the challenging operating environment into consideration (more on this below).

On a YTD basis, MET shares are down over 25%, while the S&P 500 is down only 9% and shares of American International Group (AIG) are down only 16%.


So, investors must now ask themselves where MetLife's stock price goes from here. Personally, I believe that the share price will go higher in the quarters ahead and I will explain why below. I recently added a small MetLife position in my R.I.P. portfolio due to the fact that the company has several catalysts in place to create shareholder value over the next few years. Furthermore, MET shares are attractively valued based on both earnings and adjusted book value.

Fiscal 2015 Operating Results

Let's start with reviewing some of the full-year 2015 results.

(Source: Q4 and Full-Year 2015 Earnings Results --linked above)

As shown, the results were down across the board but let me add some color to this. First, the total operating revenues were down 2% YoY and two major contributors were the lower universal life and investment-type fees

This article was written by

WG Investment Research profile picture
Our President and CIO is a CPA with experience in public accounting and the financial services industry. He earned his Master of Accountancy degree in 2008 and his B.S. in Business Management in 2007. He is also a Level III CFA candidate. He has been intrigued by the market from the start. Over the years, he has learned that long-term investing is a discipline that, if followed, will help contribute to building lasting wealth. As such, most of our articles will be about the investments that we plan to hold for at least 3 to 5 years, as long as the company's story does not change. As a Seeking Alpha contributor, our main goal is to write about the companies that are key to our portfolio with the hope of promoting discussion (for or against the investment) from others within the SA community.Please visit our website for more information about W.G. Investment Research LLC.

Disclosure: I am/we are long MET, AIG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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