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Voya Financial (VOYA) Up 12.6% in a Year: More Room to Run?
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Shares of Voya Financial, Inc. (VOYA - Free Report) have gained 12.6% in a year against the industry's decline of 2.1%. The Zacks S&P 500 composite has decreased 8.4% in the said time frame. With a market capitalization of $7.1 billion, the average volume of shares traded in the last three months was 1.5 million.
Image Source: Zacks Investment Research
The rally was largely driven by higher investment income, lower fee-based margin, favorable change in DAC/VOBA, lower administrative expenses and prudent capital deployment.
This Zacks Rank #1 (Strong Buy) insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 38.68%.
Voya Financial has an impressive Value Score of B. The insurer currently has a trailing 12-month P/B ratio of 1.2, lower than the industry range of 1.35. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Voya Financial’s 2023 earnings is pegged at $8.00, indicating a 5.5% increase from the year-ago reported figure on 7% higher revenues of $1.24 billion. The consensus estimate for 2024 earnings is pegged at $9.11, indicating a 13.8% increase from the year-ago reported figure on 4.7% higher revenues of $1.3 billion.
The expected long-term earnings growth rate is 14.2%, which is higher than the industry average of 11.2%.
Voya Financial’s earnings are driven by its solid segmental performances across Wealth Solutions, Investment Management and Health Solutions.
The Wealth Solutions segment is steadily witnessing significant growth on the back of continued strength in underlying business results, higher surplus income, lower credited interest, higher investment income, lower fee-based margin, a favorable change in DAC/VOBA and lower administrative expenses.
The Investment Management segment should gain from higher investment capital returns owing to its overall market performance and higher fee revenues, driven by higher average equity markets and positive net flows.
Voya Financial is constantly taking strategic steps to ramp up growth in its Investment Management segment. In January 2023, Voya acquired Benefitfocus, Inc. This has expanded Voya’s ability to deliver innovative solutions for employers and health plans. The deal will also allow Voya to better serve customers and deepen partnerships with other benefits administration providers and distribution partners. With Benefitfocus, the company expects earnings per share growth in the range of 12% to 17%.
The Health Solutions segment of Voya Financial is likely to benefit from growth across all product lines, higher underwriting results, improved investment income and lower net expenses.
Voya Financial’s capital levels remain strong. VOYA exited the fourth quarter with excess capital of $0.9 billion, which includes fourth-quarter 2022 capital generation above the company's target range of 90% to 100% of adjusted operating earnings. In 2022, the estimated combined adjusted risk-based capital ratio was 488% well above the 375% target.
In 2022, Voya deployed $1.2 billion of excess capital, including $750 million of share repurchases, around $360 million of subordinated debt extinguished and $80 million of dividends paid. The company expects to resume share repurchases in the second quarter of 2023, assuming macro conditions remain constructive.
Voya Financial’s return on equity of 13.1% expanded 460 basis points year over year. Return on equity is a profitability measure that shows how efficiently the company is utilizing shareholders’ money.
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.7% and 0.6% north, respectively, in the past seven days, reflecting analysts’ optimism on the stock.
Brighthouse Financial’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 2.07%. In the past year, BHF has gained 9%.
The Zacks Consensus Estimate for Brighthouse Financial’s 2023 and 2024 earnings implies a respective year-over-year rise of 24.7% and 12.5%.
The Zacks Consensus Estimate for Manulife Financial’s 2023 and 2024 earnings implies a respective year-over-year rise of 0.8% and 9.27%. In the past year, the insurer has gained 0.1%.
The Zacks Consensus Estimate for MFC’s 2023 and 2024 earnings has moved 1.2% and 1.5% north, respectively, in the past seven days.
Sun Life Financial delivered a trailing four-quarter average earnings surprise of 9.14%. In the past year, SLF has lost 4.9%.
The Zacks Consensus Estimate for Sun Life Financial’s 2024 earnings implies a year-over-year rise of 11.6%.
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Voya Financial (VOYA) Up 12.6% in a Year: More Room to Run?
Shares of Voya Financial, Inc. (VOYA - Free Report) have gained 12.6% in a year against the industry's decline of 2.1%. The Zacks S&P 500 composite has decreased 8.4% in the said time frame. With a market capitalization of $7.1 billion, the average volume of shares traded in the last three months was 1.5 million.
Image Source: Zacks Investment Research
The rally was largely driven by higher investment income, lower fee-based margin, favorable change in DAC/VOBA, lower administrative expenses and prudent capital deployment.
This Zacks Rank #1 (Strong Buy) insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 38.68%.
Voya Financial has an impressive Value Score of B. The insurer currently has a trailing 12-month P/B ratio of 1.2, lower than the industry range of 1.35. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Voya Financial’s 2023 earnings is pegged at $8.00, indicating a 5.5% increase from the year-ago reported figure on 7% higher revenues of $1.24 billion. The consensus estimate for 2024 earnings is pegged at $9.11, indicating a 13.8% increase from the year-ago reported figure on 4.7% higher revenues of $1.3 billion.
The expected long-term earnings growth rate is 14.2%, which is higher than the industry average of 11.2%.
Voya Financial’s earnings are driven by its solid segmental performances across Wealth Solutions, Investment Management and Health Solutions.
The Wealth Solutions segment is steadily witnessing significant growth on the back of continued strength in underlying business results, higher surplus income, lower credited interest, higher investment income, lower fee-based margin, a favorable change in DAC/VOBA and lower administrative expenses.
The Investment Management segment should gain from higher investment capital returns owing to its overall market performance and higher fee revenues, driven by higher average equity markets and positive net flows.
Voya Financial is constantly taking strategic steps to ramp up growth in its Investment Management segment. In January 2023, Voya acquired Benefitfocus, Inc. This has expanded Voya’s ability to deliver innovative solutions for employers and health plans. The deal will also allow Voya to better serve customers and deepen partnerships with other benefits administration providers and distribution partners. With Benefitfocus, the company expects earnings per share growth in the range of 12% to 17%.
The Health Solutions segment of Voya Financial is likely to benefit from growth across all product lines, higher underwriting results, improved investment income and lower net expenses.
Voya Financial’s capital levels remain strong. VOYA exited the fourth quarter with excess capital of $0.9 billion, which includes fourth-quarter 2022 capital generation above the company's target range of 90% to 100% of adjusted operating earnings. In 2022, the estimated combined adjusted risk-based capital ratio was 488% well above the 375% target.
In 2022, Voya deployed $1.2 billion of excess capital, including $750 million of share repurchases, around $360 million of subordinated debt extinguished and $80 million of dividends paid. The company expects to resume share repurchases in the second quarter of 2023, assuming macro conditions remain constructive.
Voya Financial’s return on equity of 13.1% expanded 460 basis points year over year. Return on equity is a profitability measure that shows how efficiently the company is utilizing shareholders’ money.
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.7% and 0.6% north, respectively, in the past seven days, reflecting analysts’ optimism on the stock.
Other Stocks to Consider
Some other top-ranked stocks from the life insurance industry are Brighthouse Financial, Inc. (BHF - Free Report) , Manulife Financial Corp (MFC - Free Report) and Sun Life Financial Inc. (SLF - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Brighthouse Financial’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 2.07%. In the past year, BHF has gained 9%.
The Zacks Consensus Estimate for Brighthouse Financial’s 2023 and 2024 earnings implies a respective year-over-year rise of 24.7% and 12.5%.
The Zacks Consensus Estimate for Manulife Financial’s 2023 and 2024 earnings implies a respective year-over-year rise of 0.8% and 9.27%. In the past year, the insurer has gained 0.1%.
The Zacks Consensus Estimate for MFC’s 2023 and 2024 earnings has moved 1.2% and 1.5% north, respectively, in the past seven days.
Sun Life Financial delivered a trailing four-quarter average earnings surprise of 9.14%. In the past year, SLF has lost 4.9%.
The Zacks Consensus Estimate for Sun Life Financial’s 2024 earnings implies a year-over-year rise of 11.6%.