MetLife Earnings: Higher Rates Drive Recurring Investment Income, but Variable Still Under Pressure

No-moat-rated MetLife reported a middling set of numbers in the fourth quarter. Adjusted earnings came in at $1.44 billion, or $1.93 per share, up 14% compared with $1.26 billion, or $1.59 per share, last year. Annualized adjusted return on equity was 14.6% in the quarter. The results were marked by strong underwriting margins in group benefits and retirement and income solutions, as well as higher net recurring investment income. The company paid a dividend of $0.52 per share in the quarter, which represents a 3.2% yield at the current stock price. Adjusted book value per share, which removes the impact of accumulated other comprehensive income, was $54.30, up 1% from $53.80 in the fourth quarter of the previous year. We are maintaining our $63 fair value estimate after incorporating the results.