GL Outperforms Industry, Trades at a Discount: How to Play the Stock

Core Insights - Globe Life Inc. (GL) shares have increased by 44% over the past year, outperforming the Finance sector's growth of 19.9% and the Zacks S&P 500 composite's growth of 11.4% [1][2][7] - The company has a market capitalization of $10.13 billion and an average trading volume of 0.6 million shares over the last three months [1] Valuation and Performance - Globe Life shares are trading at a forward price-to-earnings multiple of 8.48X, which is lower than the industry average of 12.45X, the Finance sector's 16.29X, and the Zacks S&P 500 Composite's 21.82X, indicating they are affordable [3] - The Zacks average price target for Globe Life is $142.42 per share, suggesting a potential upside of 15.9% from the last closing price [11] Growth Projections - The Zacks Consensus Estimate for Globe Life's 2025 earnings per share indicates a year-over-year increase of 10%, with revenues projected to reach $6.05 billion, reflecting a 4.6% improvement [4] - Earnings have grown by 13.3% over the past five years, surpassing the industry average growth of 5.5% [8] Financial Strength - Globe Life's trailing 12-month return on equity is 21.4%, exceeding the industry average of 15.5%, indicating effective utilization of shareholder funds [16] - The return on invested capital (ROIC) for the trailing 12 months is 12.7%, better than the industry average of 7.6%, reflecting the company's efficiency in generating income [17] Revenue Drivers - The company is experiencing revenue growth driven by premium increases in its Life Insurance and Health Insurance segments, as well as net investment income [18] - Future growth is expected to be fueled by the strong performance of the American Income and Liberty National divisions, with net life and health sales projected to grow in the mid-teens for Liberty National [19][20] Capital Position and Shareholder Value - Globe Life maintains a strong liquidity position and has targeted a consolidated Company Action Level RBC ratio of 300% to 320% for 2025 [21] - The company has consistently increased its dividend over the past eight years, with a compound annual growth rate (CAGR) of 7% [22] Conclusion - Globe Life's combination of higher sales, improved asset management, strong liquidity, and effective capital deployment positions it as an attractive investment opportunity [23] - The stock's favorable growth estimates and attractive valuations are expected to benefit the company in the long term [24]