MetLife Is (Still) Well-Positioned For 2020 And Beyond

May 12, 2020 8:52 AM ETMetLife, Inc. (MET)18 Comments
WG Investment Research profile picture
WG Investment Research


  • MetLife's stock has significantly underperformed the broader market so far in 2020. However, the company's most recent operating results were well-received by the market.
  • The takeaway: this insurer is well-positioned for 2020 and beyond, but shareholders may be in for a bumpy ride over the next few quarters.
  • We are long MetLife, and we plan to stay long the stock.

MetLife's (NYSE:MET) stock price has recovered lately but it is still significantly underperforming the broader market on a YTD basis.

ChartData by YCharts

As I recently described here, the pullback in MET shares should be viewed as a great long-term investment opportunity because this global insurer is well-positioned for the years ahead. And it helps that MetLife's Q1 2020 results show that the company's investment thesis remains intact.

The Latest, MetLife Is (Still) Well-Positioned for 2020

On May 6, 2020, MetLife report Q1 2020 results that beat the consensus bottom-line estimate but that missed on the top-line. The company reported adjusted EPS of $1.58 (beat by $0.14) on revenue of $15.5B (missed by $840mm), which from an earnings perspective actually compares favorably to the year-ago quarter.

Source: Q1 2020 Earnings Slides

The highlights:

  • Adjusted revenue grew by slightly under 1% YoY (which is saying something in this environment, in my opinion)
  • Adjusted EPS growth of 5% YoY, with U.S. adjusted earnings coming in 8% higher than the same period of the prior year.
  • Adjusted book value growth of 15% YoY (to $52.36)
  • Repurchased $500mm worth of shares during the quarter and raised the dividend by 4.5%. Note: management subsequently disclosed that they were going to "pause" buybacks due to the uncertainty.

The company reported strong operating results but, as expected, investors were most concerned about how Metlife was positioned to deal with the COVID-19 related headwinds, and rightfully so. But, management was prepared for the discussion and they did a great job in highlighting the steps that have already been taken to deal with the economic uncertainty that has been caused by the spread of the virus.

Source: Q1 2020 Earnings Slides

The company also already tapped the bond market to further strengthen its capital position and management continued

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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. 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.

Additional disclosure: Disclaimer: This article is not a recommendation to buy or sell any stock mentioned. These are only my personal opinions. Every investor must do his/her own due diligence before making any investment decision.

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