When seeking to diversify an investment portfolio, financial services are an important area for investors to use for profit. There are many publicly traded financial services companies that each offer a myriad of services. This article will discuss three financial services companies, all of whom are leaders in the annuity business.
Prudential Financial Inc., (NYSE:PRU) offers a current dividend yield above 6% and has a proven track record of providing dependable, safe financial services. The financial services provided by Prudential include life insurance, mutual funds, investment management and, of course, annuities. Prudential’s services are provided to both individual and institutional customers. It has been providing services for 140 years.
Prudential is certainly a financially sound company, boasting a strong income statement and balance sheet. Prudential further has a dominating presence in the insurance industry, with a market cap more than 3.5 times the size of the industry average, revenue for the year 2019 that was five times the industry average and other impressive metrics. The company also sees consistent sales growth, with a reported increase of 6.09% in 2019. Furthermore, Prudential offers a return on equity that is about in line with the industry average at 10.29% (industry average is 10.55%).
Brighthouse Financial Inc. (NYSE:BHF) is a spinoff company from MetLife. In 2017, MetLife decided to distinguish its U.S. retail business as its own entity and established Brighthouse Financial as an independent company that is no longer part of MetLife. The company offers retirement planning and saving services, as well as life insurance and annuities.
Brighthouse Financial is a smart investment sooner rather than later because the company is in its infant stage. It is a relatively new company (officially separated from MetLife in August 2017), and it has much growth potential. In the last month, BHF stock has gained about 37.4%, outperforming the S&P 500. This increase came after the company’s most recent earnings report that showed it beat expectations in various categories, including earnings per share and revenue. Brighthouse Financial has already begun to establish itself, being named to the Fortune 500 list in May 2019, and it has tremendous potential moving forward.
The price per share of Brighthouse Financial currently sits at $29.85 as of August 19, 2020, but that price may very well soar in the long term as the company creates a presence for itself in the financial services industry. Brighthouse Financial is currently undervalued and therefore positioned to see an increase in stock price. The stock’s undervaluation is demonstrated by its relatively low price/earnings ratio of 1.15 (industry median is 9.34), and its relatively low price/earnings growth ratio of .20 (industry median is .93).
Currently, BHF’s debt to assets ratio is 5.04 but has been steadily decreasing since the company became independent. The company’s financials are certainly improving with each year. Brighthouse Financial could be a very beneficial investment to investors who buy now, while the company is so new, and holds onto the stock for the long haul while Brighthouse Financial builds its presence.
FBL Financial Group (NYSE:FFG) offers a current dividend yield of 5.54% and provides a wide range of financial services. The company offers many types of insurance including auto, life, health, business, home and property. Additionally, FBL provides mutual funds, college planning and annuities. The company has proven itself to be well established and financially sound. Such stability is important both to potential investors and to potential insurance buyers.
FBL is a company with strong financial health, which is exemplified by its outstanding market cap and debt relationship; its market cap is $880.73 million with total debt of $97 million. FBL’s solid financial standing is further confirmed by the company’s debt to assets ratio of .90%, which is relatively low, and therefore indicative of a strong financial structure when compared to the industry average of 2.59%.
FBL’s stock is even more attractive because of the relatively high dividend payouts the company makes. FBL’s dividend yield is 5.54%.
FBL has also been seeing consistent growth in multiple aspects over recent years. It has achieved consistent sales growth for the past 5 years, gaining a 1.3% increase in sales in 2019. The company also saw a 33.92% increase in operating income in 2019.
FBL Financial Group could be a smart buy for someone seeking to make a safe investment and receive relatively high dividend payouts.
|Prudential||FBL Financial Group||Brighthouse Financial||Industry Median|
|Revenue in 2019||$64.92 billion||$744.57 million||$8.29 billion||$12.77 billion|
|Net income in 2019||$5.79 billion||$117.69 million||$1.22 billion||$989.8 million|
|Sales growth in 2019||6.09%||1.3%||3.58%||4.9%|
|Market Cap||$24.79 billion||$873.809 million||$2.95 billion||$6.9 billion|
Special thanks in preparing this summary of “The Three Best Annuity Providers for Investors to Profit” goes to Bob Carlson, leader of the Retirement Watch advisory service and chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets.