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MetLife, Inc. MET is well-placed for growth on the back of its strategic divestitures and a strong risk-based capital position.

The company even boasts a favorable earnings surprise history, having outshined the Zacks Consensus Estimate in all the trailing four quarters, the average being 9.8%. This also vouches for the company’s operating excellence.

The stock carries an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. 

Its return on equity — a profitability measure — stands at 10.2%, better than its industry's average of 7.9%.

The company’s revenue stream has been gaining since 2017 after it suffered a decline in 2015 and 2016. Revenues are expected to grow in 2019 on the back of sales uptick in Asia and EMEA plus higher operating premiums, fees and other revenues in its Group Benefits segment.

MetLife has been constantly making efforts to restructure its business for the past many years, focusing on businesses with growth potential. One of the most significant steps taken in this direction was the separation of its U.S. Retail business named BrightHouse Financial, which was completed in 2018. This sale freed the company from a capital-intensive business. Moreover, the divestiture closed the company’s UK Wealth Management business and MetLife Afore, S.A. de C.V. and its pension fund management business in Mexico. Thus, these strategic moves will reduce the vulnerability of MetLife and ensure more free cash flow over the long term.

MetLife has a strong risk-based capital position, sufficient liquidity and a low debt ratio. Its solid free cash flow has allowed it to buy back more than $10 billion of common shares over the last five years and hike its dividend, seeing a CAGR of 12% since 2011. The company targets to return 65-75% of earnings over a two-year period (2019-2021).
The Zacks Consensus Estimate for current-year earnings per share is pegged at $5.61, indicating an increase of 4.1% on revenues of $64.6 billion from the year-ago reported figures.

For 2020, the Zacks Consensus Estimate for earnings per share stands at $6.08 on $66.6 billion revenues, implying a respective 8.4% and 3.1% rise from the prior-year reported numbers.

Shares of this Zacks Rank #2 (Buy) company have gained 5.7% in a year’s time, outperforming its Zacks Investment Research

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