Shares of Globe Life Inc. GL have gained 33.9% in the past six months, outperforming the industry's growth of 14%. The Finance sector and the Zacks S&P 500 index have returned 8.9% and 6.3%, respectively, in the said time frame. With a market capitalization of $9.58 billion, the average volume of shares traded in the last three months was 0.6 million.
GL Outperforms Industry, Sector, S&P in 6 Months
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Earnings have grown 12.4% in the past five years, better than the industry average of 5.4%. This Zacks Rank #2 (Buy) insurer has a solid track record of beating earnings estimates in three of the past four quarters while missing in one, with an average surprise of 4.58%.
GL Trading Above 50-Day and 200-Day Moving Averages
GL currently closed at $114.12 and is trading above its 50-day and 200-day simple moving averages (SMA) of $108.42 and $96.44, respectively, representing an uptrend. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
GL’s Growth Projection
The Zacks Consensus Estimate for Globe Life’s 2025 earnings per share and revenues indicates an increase of 10% and 5%, respectively, from the corresponding 2024 estimates.
Positive Analyst Sentiment Instills Confidence in GL
One of the seven analysts covering the stock has raised estimates for 2025 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 moved 0.1% north in the last 30 days.
GL’s Return on Capital
GL’s trailing 12-month return on equity is 22.9%, ahead of the industry average of 19%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Also, the return on invested capital (ROIC) in the trailing 12 months was 13.7%, better than the industry average of 4.9%. Its ROIC has been increasing over the last few quarters amid capital investment made over the same time frame. This reflects the company’s efficiency in utilizing funds to generate income.
Can the Stock Retain the Momentum?
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 comprise 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%.
GL Shares are Affordable
Globe Life is trading at a discount compared with the industry average. It presents a compelling investment opportunity with its attractive forward 12-month price-to-book ratio of 2.07X, lower than the industry average of 2.98X. Also, it has a Value Score of A.
Other Stocks to Consider
Some other top-ranked stocks from the finance sector are Equitable Holdings, Inc. EQH, Moody's Corporation MCO and FlexShopper Inc. FPAY, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Equitable Holdings’ 2025 earnings per share and revenues implies year-over-year growth of 19.7% and 10.4%, respectively. It beat earnings estimates in each of the past four quarters, with an average surprise of 6.41%. In the past six months, shares of EQH have risen 16.6%.
The Zacks Consensus Estimate for Moody's 2025 earnings per share and revenues implies year-over-year growth of 8.3% and 5.9%, respectively. It beat earnings estimates in three of the past four quarters and missed in one, with an average surprise of 5.50%. In the past six months, shares of MCO have rallied 6.5%.
The Zacks Consensus Estimate for FlexShopper’s 2025 earnings per share and revenues implies year-over-year growth of 454.5% and 14.4%, respectively. It beat earnings estimates in each of the past four quarters, with an average surprise of 72.95%. In the past six months, shares of FPAY have gained 67.6%.
Research Chief Names "Single Best Pick to Double"
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Moody's Corporation (MCO) : Free Stock Analysis Report
FlexShopper Inc. (FPAY) : Free Stock Analysis Report
Equitable Holdings, Inc. (EQH) : Free Stock Analysis Report
Globe Life Inc. (GL) : Free Stock Analysis Report
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