Back to top

Image: Shutterstock

Here's Why You Should Add Globe Life (GL) to Your Portfolio

Read MoreHide Full Article

Globe Life Inc. (GL - Free Report) has been in investors’ good books owing to higher life and health sales, improved invested assets, increased productivity and agent count, strong liquidity position and effective capital deployment.

Earnings Estimate

The Zacks Consensus Estimate for Globe Life’s 2024 earnings per share indicates a year-over-year increase of 11.9%. The consensus estimate for revenues is pegged at $5.82 billion, implying a year-over-year improvement of 5.6%.

The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 9.8% and 4.8%, respectively, from the corresponding 2024 estimates.

Earnings have improved 12.4% in the past five years, better than the industry average of 4.8%.

Northbound Estimate Revision

The Zacks Consensus Estimate for GL’s 2024 and 2025 earnings has moved 1.7% and 1.9% north, respectively, in the past 60 days. This should instill investors' confidence in the stock.

Earnings Surprise History

Globe Life has a decent surprise history, beating estimates in three of the last four quarters while missing in one, the average earnings surprise being 1.54%.

Zacks Rank & Price Performance

GL currently carries a Zacks Rank #2 (Buy). In the past year, the stock has plunged 20.3% against the industry’s growth of 13.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

Business Tailwinds

Globe Life has been witnessing a positive trend in revenues, driven by premium growth in its Life Insurance and Health Insurance segments and net investment income. 

The strong performance of the American Income and Liberty National divisions should drive the top line in the future. Liberty National is likely to continue to benefit from improved productivity and agent count. GL’s expansion initiatives to capture heavily populated and less penetrated areas should drive growth in the future. Net life sales, as well as net health sales, are expected to grow in the mid-teens for Liberty National.

Moreover, net investment income continues to be another important driver of the company’s top-line growth and has been exhibiting improvement over the last few years. The metric is likely to keep growing, riding on improved invested assets and higher interest rates on new investments.

The company has maintained a strong liquidity position with sufficient cash-generation capabilities. Its operations consist primarily of writing basic protection life and supplemental health insurance policies, which generate strong and stable cash flows. For 2024, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300-320%. 

A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. The insurer has continuously been increasing its dividend over the past eight years (2016-2023) at a CAGR of 6.79%.

Other Stocks to Consider

Some other top-ranked stocks from the Financial-Miscellaneous Services space are StoneX Group Inc. (SNEX - Free Report) , WisdomTree, Inc. (WT - Free Report) and Euronet Worldwide, Inc. (EEFT - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
 
StepStone has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.25%. In the past year, shares of SNEX have jumped 17.9%.

The Zacks Consensus Estimate for SNEX’s 2024 and 2025 earnings has moved 2.78% and 0.1% north in the past 30 days.  

WisdomTree’s earnings surpassed estimates in two of the last four quarters and matched in the other two, the average surprise being 5.85%. In the past year, shares of WT have soared 44.7%.

The Zacks Consensus Estimate for WT’s 2024 and 2025 earnings implies year-over-year growth of 64.8% and 7.6%, respectively. 

Euronet Worldwide has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 9.04%. In the past year, shares of EEFT have gained 14.4%.

The Zacks Consensus Estimate for EEFT’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 12.1%, respectively.

Published in