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Here's Why Investors Should Retain Voya Financial (VOYA) Stock

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Voya Financial, Inc. VOYA has been benefiting from higher surplus income, favorable alternative and prepayment income, higher alternative asset income, increased investment capital returns and higher fee revenues.

Estimate Revision

The Zacks Consensus Estimate for Voya Financial’s 2022 earnings has moved 1.6% north in the past seven days, reflecting analysts’ optimism.

Earnings Surprise History

Voya Financial surpassed estimates in two of the last four reported quarters and missed in the other two, with the average beat being 9.6%.

Zacks Rank & Price Performance

Voya Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 23.2% against the industry’s decline of 4.3%.

Zacks Investment Research
Zacks Investment Research

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Business Tailwinds

Voya Financial’s core business, the Wealth Solutions segment has been witnessing significant growth on the back of favorable alternative and prepayment income, continued strength in underlying business results, higher surplus income as well as lower credited interest, higher investment income, full-service client net flows and favorable equity markets.

The life insurer witnessed six consecutive years of overall positive net inflows on the back of strength in the institutional platform.

The Investment Management segment of Voya Financial should gain from growth in both institutional and retail client assets, favorable investment capital, higher investment capital returns and higher fee revenues, driven by higher average equity markets.

Considering growth across all product lines, continued demand for protection solutions among both employers and employees, strong alternative and prepayment income, growth of the Stop Loss and Voluntary blocks of business as well as higher alternative asset income, the Health Solutions segment of VOYA is likely to benefit in the upcoming quarters.

Voya Financial’s EPS growth is likely to be driven by net revenue growth, margin expansion, and capital management.

VOYA boasts a solid balance sheet as well as improving leverage.

On the back of its financial strength, it returns value to shareholders in the form of share buybacks and dividend hikes. The insurer increased dividends to more than 20% in the fourth quarter of 2021. VOYA is able to maintain a dividend yield of over 1%. Given the strong excess capital and RBC ratio, the board has approved a new $500 million share repurchase authorization.

Voya Financial unveiled its financial plan for 2024. The insurer estimates annual adjusted operating earnings per share growth of about 12-17% through 2024. Net revenue growth of 4-6%, margin expansion of 1-2%, and prudent capital management should help Voya Financial achieve the target.

Voya Financial’s earnings are expected to be driven by solid performance across Wealth Solutions, Investment Management and Health Solutions. This leading health, wealth, and investment company expects net annual revenue growth of 2-4% in Wealth Solutions, 7-10% in Investment Management, and 5-7% in Health Solutions segments to contribute to total net revenue growth. Voya Financial’s prudent capital management includes the realization of 90% to 100% free cash flow conversion in the next three years and operating return on equity between 14% and 16%.

Stocks to Consider

Some better-ranked insurers include Fidelity National Financial FNF, Hallmark Financial Services HALL and Primerica PRI. While Fidelity National and Hallmark Financial sport a Zacks Rank #1 (Strong Buy), Primerica carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fidelity National’s earnings surpassed estimates in each of the last four quarters, the average beat being 38.1%. In the past year, FNF has gained 31.6%.

The Zacks Consensus Estimate for Fidelity National’s 2022 earnings has moved 4.6% north in the past 60 days.

The bottom line of Hallmark Financial surpassed estimates in two of the last four quarters and missed the same in the other two, the average being 53.6%.

In the past year, Hallmark Financial has rallied 26.6%. The Zacks Consensus Estimate for 2022 earnings has moved 60% north in the past 60 days.

Primerica’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and missed in the other two, the average beat being 3.2%. In the past year, PRI has gained 10.1%.

The Zacks Consensus Estimate for PRI’s 2022 earnings implies a year-over-year increase of 13.2%.


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Primerica, Inc. (PRI) : Free Stock Analysis Report

Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report

Hallmark Financial Services, Inc. (HALL) : Free Stock Analysis Report

Voya Financial, Inc. (VOYA) : Free Stock Analysis Report

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