Will MetLife (MET) Stock Be Affected by 'Systemically Important' Designation?

NEW YORK (TheStreet) -- MetLife (MET) shares are down 0.8% to $53.60 in after-hours trading today after U.S. financial regulators declared that the financial health insurance company was "strategically important" to the financial health of the U.S. economy.

MetLife had been fighting the designation by the Financial Stability Oversight Council due to the added scrutiny the company now faces as a result of the ruling.

MetLife has to increase the amount of capital in its reserves to cushion against major potential losses, limit its use of borrowed money and submit to inspections by examiners, according to the Associated Press.

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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, revenue growth, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • METLIFE INC reported significant earnings per share improvement 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 ($5.80 versus $2.91).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 115.4% when compared to the same quarter one year prior, rising from $972.00 million to $2,094.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 21.6%. Since the same quarter one year prior, revenues rose by 15.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 50.89% to $4,029.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 33.95%.
  • You can view the full analysis from the report here: MET Ratings Report
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