Voya Financial (NYSE:VOYA), Inc. VOYA has been in investors’ good books on the back of growth across all product lines, strong alternative and prepayment income, strategic acquisitions, and strong financial standing.
Growth Projections
The Zacks Consensus Estimate for 2021 earnings per share is pegged at $7.09, indicating a year-over-year increase of 47.7%.
Estimate Revision
The Zacks Consensus Estimate for 2021 and 2022 has moved 13.8% and 0.4% north, respectively in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Voya surpassed estimates in two of the last four reported quarters and missed in the other two, with the average beat being 9.13%.
Zacks Rank & Price Performance
Voya currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 26.9%, outperforming the industry’s growth of 7%.
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Business Tailwinds
Banking on favorable investment capital results, which are above the long-term target, and growth in both institutional and retail client assets, Investment Management is likely to gain.
By virtue of return to institutional inflows and new mandates, particularly in fixed income strategies, Investment Management saw a return to positive net cash flows of $249 million in the reported second quarter.
Health Solutions should benefit from strong alternative and prepayment income that exceeded the long-term target by $11 million as well as growth across all product lines. In Health Solutions, voluntary loss ratios are expected to normalize in the days ahead.
Wealth Solutions is likely to improve on the back of higher investment income, increased fee-based margin, favorable change in deferred acquisition costs and value of business acquired (DAC/VOBA), lower administrative expenses, and other intangibles unlocking. Furthermore, in the reported quarter, adjusted operating earnings surged nearly eight-fold year over year.
Solid performance across its segments, Wealth Solutions, and Investment Management are likely to drive revenues in the days ahead.
At the beginning of the third quarter, the life insurer closed the acquisition of Benefit Strategies, which is projected to expand its capabilities to meet the evolving needs of the workplace and institutional clients. Moreover, the deal will accelerate the insurer’s presence in the fast-growing HSA market and expand on a range of solutions offered through the workplace.
Limited COVID-related headwinds and a strong pipeline for 2022 are anticipated to boost the earnings of Voya Financial.
Moreover, Voya boasts a solid balance sheet as well as improving leverage. It has excess capital of $1.5 billion, which included the proceeds from the sale of Independent Financial Planning Channel. As of Jun 30, 2021, the estimated RBC ratio was 545% while the financial leverage ratio improved year over year to 30.2%, which highlights strong earnings, gain on sale impacts, and increases in AOCI and non-controlling interests driven by financial markets.
On the back of its financial strength, it returns value to shareholders in the form of share buybacks and dividend hikes. It approved a quarterly cash dividend hike of 10% in January 2021. In the first half, it repurchased $753 million of shares and expects to buy back at least $1 billion of shares during 2021.
Other Stocks to Consider
Some other top-ranked insurers include Athene Holding (NYSE:ATH) Ltd. ATH, Brighthouse Financial (NASDAQ:BHF), Inc. BHF, and Alleghany (NYSE:Y) Corporation Y, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The bottom line of Athene surpassed estimates in each of the last four quarters, the average being 47.78%.
Brighthouse surpassed estimates in each of the last four quarters, the average being 52.23%.
Alleghany’s earnings surpassed estimates in each of the last four quarters, the average being 91.26%.
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Alleghany Corporation (Y): Free Stock Analysis Report
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