March 9 MetLife Inc is by some measures
one of the cheapest Standard & Poor's 500 stocks, and its shares
could rise because the largest publicly-traded U.S. life insurer
has a attractive global franchise and astute management, and may
hike its dividend significantly, Barron's said in its March 10
With a stock price of $53.15, MetLife trades at just 9.3
times projected 2014 profit of $5.70 per share and 8.7 times
projected 2015 profit of $6.12 per share, according to Thomson
Barron's said the 2015 projection is the lowest in the life
insurance industry, and that fewer than 10 companies in the S&P
500 have lower ratios. Two with similar ratios are insurers
Prudential Financial Inc and Lincoln Financial Corp
In addition, MetLife is trading at just 1.1 times book value
per share excluding unrealized investment gains, also among the
lowest in the S&P 500, Barron's said.
Fans say the stock price could rise above $60, and that the
company known for its blimp and for advertising featuring Snoopy
and other "Peanuts" characters could benefit from both a rising
stock market and higher interest rates.
According to the newspaper, part of the reason for the low
price is MetLife's refusal to buy back stock, as it awaits U.S.
regulatory decisions on capital requirements and whether it will
be declared a "systemically important financial institution," a
label that several of the nation's biggest banks already carry.
But the newspaper said Chief Executive Steven Kandarian has
made reducing risk a priority, cutting back in variable
annuities and halting sales of products such as new long-term
care insurance policies and one type of universal life
Meanwhile, rising stocks boost potential profit from
equity-sensitive annuities, and rising rates could help MetLife
more affordably fund fixed-rate products and cut risk on
offerings that guarantee investors minimum returns, the
Even if growth slows in the United States, MetLife has a
cushion because 30 percent of its profit comes from other
countries, and the overseas business is growing faster than the
U.S. business, the newspaper said.
MetLife's annual $1.10 per share dividend equates to a 2.1
percent dividend yield, and Barron's said it could approach
$1.50 per share in 2015, or nearly 3 percent based on the
current stock price.