According to Bloomberg, the bill gives Federal Reserve regulators more flexibility in applying capital rules to big U.S. life insurers. Under the current provision, the Federal Reserve puts capital standard similar to those put on banks on insurers deemed "systemically important." MetLife is in the final stages of being designated systemically important.
The new bill would give the Federal Reserve the flexibility to change those regulations for the MetLife and Prudential (PRU), which is currently designated at systemically important.
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TheStreet Ratings team rates METLIFE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate METLIFE INC (MET) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- METLIFE INC has improved earnings per share by 31.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, METLIFE INC increased its bottom line by earning $2.91 versus $1.09 in the prior year. This year, the market expects an improvement in earnings ($5.65 versus $2.91).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Insurance industry average. The net income increased by 34.7% when compared to the same quarter one year prior, rising from $986.00 million to $1,328.00 million.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- MET, with its decline in revenue, underperformed when compared the industry average of 7.9%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- You can view the full analysis from the report here: MET Ratings Report