Since January 2025, MetLife has been in a holding pattern, posting a small loss of 2.5% while floating around $78.24. The stock also fell short of the S&P 500’s 7.5% gain during that period.
Is now the time to buy MetLife, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.
Why Do We Think MetLife Will Underperform?
We're sitting this one out for now. Here are three reasons why MET doesn't excite us and a stock we'd rather own.
1. Declining Net Premiums Earned Reflects Weakness
Net premiums earned commands greater market attention due to its reliability and consistency, whereas investment and fee income are often seen as more volatile revenue streams that fluctuate with market conditions.
MetLife’s net premiums earned has declined by 1.1% annually over the last two years, much worse than the broader insurance industry. This shows that policy underwriting underperformed its other business lines.
2. EPS Barely Growing
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
MetLife’s EPS grew at a weak 4.4% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 2.2% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
3. Declining BVPS Reflects Erosion of Asset Value
Book value per share (BVPS) serves as a key indicator of an insurer’s financial stability, reflecting a company’s ability to maintain adequate capital levels and meet its long-term obligations to policyholders.
To the detriment of investors, MetLife’s BVPS declined at a 1.2% annual clip over the last two years.
Final Judgment
We cheer for all companies serving everyday consumers, but in the case of MetLife, we’ll be cheering from the sidelines. With its shares underperforming the market lately, the stock trades at 2× forward P/B (or $78.24 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better stocks to buy right now. We’d recommend looking at one of our top software and edge computing picks.
Stocks We Like More Than MetLife
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