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MetLife: Tough Environment But Good Results

Feb. 11, 2019 11:24 AM ETMetLife, Inc. (MET)4 Comments
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  • MetLife recently reported strong Q4 and Full-year 2018 operating results, but the stock has been under pressure since the earnings report was released.
  • This insurer is well-positioned for 2019 and beyond, but shareholders may be in for a bumpy ride over the next few quarters.
  • I am long MetLife, and I plan to stay long the stock.
  • This idea was discussed in more depth with members of my private investing community, Going Long With W.G.. Start your free trial today »

MetLife (NYSE:MET) recently reported Q4 and Full-year 2018 results that were not well-received by the market, as shown by the fact that the stock is down by over 5% since the results were released.

While MetLife's operating results definitely left investors wanting more, I believe that the insurer started 2019 with a good earnings report. Moreover, MetLife appears to be well-positioned for 2019 so, in my opinion, investors with a long-term mindset should consider adding MET shares on pullbacks.

The Latest, Tough Environment But Good Results

On February 6, 2019, MetLife reported Q4 2018 results that missed on the top-line but that beat the consensus earnings estimate. The insurer reported adjusted Q4 2018 EPS of $1.35 (beat by $0.07) on revenue of $15.6B (missed by $220M). On an annual basis, MetLife's most recent results were strong across the board when compared to the prior fiscal year.

Source: Q4 and Full-year 2018 Earnings Press Release

The U.S. tax reform bill was a major factor for the YoY earnings growth, but MetLife's management team also had the company well-positioned for 2018, as shown by the highlights:

  • Total revenue grew by 9% YoY with Premiums, fees, & other revenues higher by 12%
  • Reported net income of $5B (up from $3.9B in 2017), which translated into net income per share growth of 36% YoY (to $4.91 per share)
  • Adjusted book value grew by 4% YoY (from $42.92 to $44.62)
  • Returned a record $5.7B to shareholders through buybacks and dividends in 2018

2018 turned out to be a challenging period of time for the broader market, but the stocks of the large global insurance companies were hit worst.

The poor stock performance, however, does not tell the whole story as MetLife was able to deliver strong operating results for the

This article was written by

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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.

Analyst’s Disclosure: I am/we are long MET, BHF. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (4)

I prefer PRU, but I do own both.
The BHF report seemed very interesting and a better valuation if 4Q is a sign to come for their operations
How big is the LTC business?
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jtl3eye659 - I covered LTC in my last article: seekingalpha.com/...

There have been no material changes since the mid-Dec 2018 article that is linked above.

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