MetLife Earnings: Weaker Group Benefits Underwriting Margins Weighted on Otherwise Decent Results

No-moat-rated MetLife reported a decent set of numbers in the first quarter, even as weaker underwriting margins in the group benefits segment weighed on overall results. The firm reported adjusted earnings of $1.33 billion, or $1.83 per share, up 20.4% compared with $1.18 billion, or $1.52 per share in the first quarter of the previous year. The company reported an annualized adjusted return on equity of 13.8%. The first-quarter results were marked by mixed underwriting margins in different business segments and higher recurring net investment income. MetLife paid a quarterly dividend of $0.52 per share in the fourth quarter, which represents a 3.0% dividend yield as of the current stock price. The company also announced the addition of $3 billion to its repurchase authorization, signaling continued capital return to shareholders through share repurchases. The adjusted book value per share, which removes the impact of accumulated other comprehensive income, or AOCI, was reported at $53.13 per share, down 1% compared with $53.83 per share in the first quarter of the previous year. We are maintaining our $66 per share fair value estimate for MetLife after incorporating the first-quarter results.