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Life Insurance Stocks Look Cheap Ahead of Q4 Earnings

Ameriprise Financial (AMP) will report earnings on Feb. 4. Analysts expect earnings of $360 million, or $1.81 a share, compared to $1.91 the previous quarter and $1.71 a year earlier. "We expect AMP will continue to return capital at a healthy clip, as we estimate a buyback amount of $375mm in the quarter in addition to a $100mm dividend, for $475mm total capital return," Gallagher wrote. He has a neutral rating on Ameriprise and estimates the company will earn $7.93 a share during 2014, with EPS rising to $8.85 in 2015. Ameriprise Financial's shares closed at $106.54 Tuesday and traded for 11.7 times the consensus 2015 EPS estimate of $9.10.

Lincoln National (LNC) will announce its fourth-quarter results on Feb. 5, with a consensus earnings estimate of $346 million, or $1.28 a share, compared to $1.34 in the third quarter and $1.10 during the fourth quarter of 2014. Kinar rates Lincoln National a "buy," with a $56 price target, and expects 17% year-over-year earnings growth for the company from rising stock prices and yields on U.S. Treasury bonds. Lincoln National's shares closed at $47.82 Tuesday and traded for 8.2 times the consensus 2015 EPS estimate of $5.84.

Prudential Financial (PRU) is scheduled to report its earnings on Feb. 5, with analysts expecting earnings of $1.029 billion, or $2.33 a share, compared to $2.94 in the third quarter (when the company's pretax earnings saw a net benefit of $398 million from one-time items), and $1.69 during the fourth quarter of 2012. "We estimate PRU will have a solid 4Q13 as a result of higher equity markets in the US and Japan, earning $2.33 of EPS in the quarter," Gallagher wrote. He rates Prudential "outperform," with a $95 price target, and estimates Prudential will earn $9.26 a share in 2014, with EPS growing to $10.04 in 2015. Prudential's shares closed at $84.46 Tuesday and traded for 8.5 times the consensus 2015 EPS estimate of $9.99.

MetLife (MET) will report on Feb. 12. Analysts expect fourth-quarter earnings of $1.478 billion, or $1.30 a share, compared to $1.34 the previous quarter and $1.25 a year earlier. Kinar rates the stock a "buy," with a $59 price target. "Our operating EPS estimate is essentially flat YoY and a two pennies below Consensus, as 5% earnings growth is largely offset by an increase in share count, reflecting the conversion of $1 bil in equity units in 2013." MetLife has been waiting to announce share buybacks, as CEO Steven Kandarian has repeated said he is looking for "clarity" from the Federal Reserve on how the regulator will treat non-bank systemically important financial institution (GSIFI). MetLife's shares closed at $49.63 Tuesday and traded for 8.1 times the consensus 2015 EPS estimate of $6.12.

Stock quotes in this article: MET, PRU, AIG, AFL, PFG, HIG, AMP 

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