This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Life Insurance Stocks With Up to 64% Upside

Stocks in this article: BAC MET LNC PRU AMP AEL

NEW YORK ( TheStreet) -- The stocks of profitable life insurers are trading at historically low multiples, providing wonderful long-term opportunities for investors as the sector flies under the radar.

With the financial news media fixated on the endless mortgage travails of Bank of America (BAC) and the almost nonstop flow of regulatory interpretations of the Dodd-Frank Wall Street Reform and Consumer Protection Act, it's easy to forget that some niches of the financial sector are pretty darn healthy despite stubborn unemployment and continually low interest rates.

Credit Suisse analyst Thomas Gallagher said last week that although some investors consider life insurance to be one of the most "structurally challenged financial subsectors" because of the effect of low interest rates on investment portfolios, "the group appears to be trading as if the true economic impact is more severe."

With many life insurers trading well below book value -- while facing much less risk than similarly priced banks that face unknown risks from mortgage putback lawsuits (like Bank of America) and much smaller regulatory targets on their backs -- Gavin Magor, a senior analyst with Weiss Ratings, says "investors are looking at a pretty good deal" for healthier sector players. Although the sector as a whole "should be trading at a discount to book value because of asset quality uncertainty, this is a solid industry, that is financially very viable," he says."

Using data provided by SNL Financial, TheStreet has identified the five actively traded U.S. life insurers with the most upside potential based on consensus price targets among analysts. Most of the names are trading well below tangible book value and are also trading at forward price multiples even lower than the largest U.S. banks.

Bank of America -- which arguably faces the highest level of uncertainty among the nation's largest banks -- closed at $7.23 on Friday, or six times the consensus 2012 earnings estimate of $1.23 a share, among analysts polled by FactSet. Three of the five profitable life insurers discussed here trade at even lower multiples.

Here are the five actively traded insurance companies with the most upside implied by mean price targets among analysts polled by FactSet:

1 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs