By Rob Otman
MetLife (NYSE: MET) is a $60 billion company today. Investors that bought shares one year ago are sitting on a 32.67% total return. That’s above the S&P 500’s return of 16.31%.
MetLife stock is beating the market, and it reports earnings next week. But does that make it a good buy today? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✗ Earnings-per-Share (EPS) Growth: MetLife reported a recent EPS growth rate of -62.31%. That’s below the insurance industry average of 51.68%. That’s not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the insurance industry is 17.15. And MetLife’s ratio comes in at 11.99. It’s trading at a better value than many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for MetLife stock is 35.24. That’s below the insurance industry average of 53.65. The company is less leveraged.
✓ Free Cash Flow per Share Growth: MetLife’s FCF has been higher than that of its competitors over the last year. That’s good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✗ Profit Margins: The profit margin of MetLife comes in at 5.08% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. MetLife’s profit margin is below the insurance average of 9.2%. So that’s a negative indicator for investors.
✗ Return on Equity: Return on equity tells us how much profit a company produces with the money shareholders invest. The ROE for MetLife is -0.97%, and that’s below its industry average ROE of 10.28%.
MetLife stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
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Source:: Investment You
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