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F&G Annuities & Life Inc (FG)
NYSE:FG
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F&G Annuities & Life Inc
(NYSE:FG)
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Rating:64Neutral
Price Target:
$25.00
▲(20.83% Upside)
Action:DowngradedDate:02/27/26
The score is driven primarily by cash-flow strength and generally manageable leverage, tempered by volatile profitability and weaker returns in 2025. Valuation is supportive (P/E ~12 and ~3.9% yield), but technicals are a notable headwind with a clear downtrend despite oversold readings. Earnings-call tone is constructive on AUM growth, capital strength, and the shift to fee-based earnings, but alternative-investment underperformance and near-term variability keep the score in the mid-range.
Positive Factors
Cash generation
Very large, resilient free cash flow (~$4.7B in 2025) that closely tracks operating cash flow supports capital returns, deleveraging and reinvestment. For an annuities insurer, durable cash generation underpins solvency, funds guarantees, and finances strategic shifts and distributions.
Balance-sheet strength
Leverage appears manageable (debt-to-equity ~0.47 in 2025) while equity has built to ~$4.8B and statutory RBC is ~430%. This capital cushion increases capacity to underwrite liabilities, execute reinsurance, absorb investment shocks and sustain medium-term distributions.
AUM growth and fee shift
Record AUM ($73.1B) and a deliberate shift toward fee-based revenues (15% of adjusted earnings in 2025, targeting ~25% by 2028) should lower capital intensity per dollar of revenue, increase recurring income and improve margin sustainability over the medium term.
Negative Factors
Volatile profitability
Profitability has been uneven, with net margin dropping sharply to ~4.6% in 2025 from ~11.8% in 2024 and losses in prior years. Such volatility undermines return-on-equity consistency, limits retained-earnings growth and complicates and constrains multi-period capital allocation decisions.
Alternative-investment underperformance
Alternatives returned ~7% annualized versus a 10% long-term target, producing a sizable FY shortfall (~$278M). Persistent underperformance reduces expected investment spreads and ROE, and exposes earnings to the timing of private-asset realizations and broader market cycles.
AUM/earnings base hit and variability
Selling the Bermuda entity recaptures liabilities and provides capital but will reduce AUM by ~ $1.9B and forgo about $40M of annual adjusted earnings pre-deployment. Coupled with surrender/prepayment variability, this structurally reduces revenue visibility and can increase near-term earnings volatility.
F&G Annuities & Life Inc (FG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.81B
Dividend Yield2.91%
Average Volume (3M)552.59K
Price to Earnings (P/E)15.3
Beta (1Y)1.10
Revenue Growth-4.58%
EPS GrowthN/A
CountryUS
Employees1,300
SectorFinancial
Sector Strength70
IndustryInsurance - Life
Share Statistics
EPS (TTM)0.91
Shares Outstanding135,610,120
10 Day Avg. Volume538,618
30 Day Avg. Volume552,589
Financial Highlights & Ratios
PEG Ratio-0.25
Price to Book (P/B)0.84
Price to Sales (P/S)0.71
P/FCF Ratio0.87
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue0.65
Enterprise Value/Gross Profit2.28
Enterprise Value/Ebitda3.10
Forecast
1Y Price Target
$32.00Price Target Upside54.66% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)5.67
Revenue Forecast (FY)$6.25B
F&G Annuities & Life Inc Business Overview & Revenue Model
Company DescriptionF&G Annuities & Life, Inc. provides fixed annuities and life insurance products. It serves retail annuity and life customers, as well as institutional clients. The company was founded in 1959 and is headquartered in Des Moines, Iowa. F&G Annuities & Life, Inc. is a subsidiary of Fidelity National Financial, Inc.
How the Company Makes MoneyF&G Annuities & Life Inc generates revenue through several key streams. Primarily, the company earns income from the sale of its annuity and life insurance products, which involve collecting premiums from policyholders. The company invests these premiums in various financial instruments, generating investment income that contributes significantly to its overall revenue. Additionally, F&G may earn fees from managing its investment portfolio and from the administration of its insurance products. Strategic partnerships with financial advisors and broker-dealers enhance distribution channels, further increasing sales and market reach. Overall, the company's revenue model relies on a combination of premium collection, investment income, and service fees, which collectively support its financial performance.
F&G Annuities & Life Inc Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call emphasized multiple material positives: record AUM, robust gross sales (including core products), improved expense efficiency, strong statutory capital (RBC ~430%), and growing fee-based income (flow reinsurance and owned distribution). Management acknowledged underperformance in alternative investment returns (approximately 7% vs a 10% long-term target) with a significant FY shortfall ($278M) and flagged near-term variability from surrenders and prepayments as potential headwinds. The company is taking disclosure and strategic actions (reclassifying alternative returns, selling an offshore legal entity, optimizing product mix, and pursuing FABN issuances) to strengthen financial flexibility and investor clarity. Overall, the positive operational and capital achievements outweigh the challenges tied to alternative returns and short-term volatility, with management projecting continued progress toward fee-based, higher-margin earnings.Q4-2025 Updates
Positive Updates
Record AUM and Midpoint Progress Toward Targets
Achieved record AUM before flow reinsurance of $73.1B (up 12% vs year-end 2024) and retained AUM of $57.6B (up 7% vs year-end 2024). AUM grew from a $51B 2020 baseline to $73B at year-end 2025 (a 44% increase toward the five-year 50% target).
Strong Sales Performance
Generated $14.6B of gross sales for FY2025 (second highest year on record), including $9.0B in core product sales and $5.6B in opportunistic sales. Q4 gross sales were $3.4B with core Q4 sales of $2.8B (up 27% sequentially from Q3).
Core Product Momentum
Indexed annuities $6.7B for FY2025 (in line with 2024) with Q4 indexed annuity sales of $1.9B (up 12% YoY). Indexed universal life (IUL) sales $190M for the year (up 14% YoY). Pension risk transfer (PRT) sales $2.1B for the year (third consecutive year ≥ $2B).
Improving Expense Efficiency
Operating expense ratio to AUM before flow reinsurance improved to 50 basis points at year-end 2025 from 60 basis points in 2024 (a 10 bps improvement). Company targets ~45 bps by year-end 2027.
High-Quality Investment Portfolio and Credit Metrics
Retained fixed maturities were 97% investment grade at year-end 2025. Private origination portfolio ~92% investment grade. Credit-related impairments remained stable at 8 basis points in 2025. Fixed income yield was 4.65% in Q4, up 6 bps YoY.
Growing Fee-Based Earnings
Fee income from flow reinsurance rose to $56M for FY2025 (up 37% vs $41M in 2024). Owned distribution margin contributed $47M (up 2% YoY). Fee-based strategies accounted for ~15% of adjusted net earnings in 2025 and management expects ~25% by year-end 2028.
Solid Adjusted Earnings and Capital Actions
Reported adjusted net earnings of $482M for FY2025 ($3.64 per share) and $123M in Q4 ($0.91). Company returned $137M of capital to shareholders in 2025, increased quarterly common dividend by 14% in Q4, and reported GAAP common equity excluding AOCI of $6.0B with book value per share excluding AOCI of $44.43 (up 62% since 2020 acquisition).
Strong Statutory Capital and Deleveraging Plan
Primary operating subsidiary company action level RBC approx. 430% (above 400% target). Targeting ~25% debt to capitalization excluding AOCI and expect balance sheet to naturally delever over time. Annualized interest expense ~$165M on $2.3B total debt.
Strategic Capital Transaction
On track to sell Bermuda legal entity F&G Life Re Limited to Ancient Financial Holdings LP (effective March 1). Recaptured ~$900M of affiliated statutory liabilities; expect net proceeds ≈ $300M (including a $200M dividend already reflected at year-end). Transaction provides capital transfer and counterparty diversification for MYGA flow reinsurance.
Negative Updates
Alternative Investment Returns Below Long-Term Expectations
Annualized return on alternative investments was ~7% in Q4 versus a 10% long-term expected return. Alternative investment income missed management expectations by $65M in Q4 and by $278M for the full year, prompting a disclosure change to reclassify ~60% (~$7B) of alternatives into fixed income yield for better comparability.
Decline in MYGA Volumes
MYGA sales were $3.8B for FY2025 versus $5.1B in 2024 (down about 25% YoY) as the company intentionally moderated MYGA volumes in favor of more attractive capital deployment and flow reinsurance optimization.
Slight Decline in Net Retained Sales
Net sales retained totaled $10.0B for FY2025 compared with $10.6B in FY2024 (down roughly 5.7%), with Q4 net sales of $2.3B down slightly YoY.
Earnings Variability Risk from Surrenders and Prepayments
Elevated annuity terminations have boosted earnings via surrender charge income but can pressure near-term spreads; management expects potential quarterly variability in 2026. Prepayment fees totaled $56M for the year (in line with 2024), but management notes prepayment volatility could be a headwind in 2026.
One-Time and Foregone Earnings Items
Full year adjusted net earnings included $30M of favorable significant items (one-time). The sale of the Bermuda legal entity will reduce AUM by ~$1.9B and forego annual adjusted net earnings of about $40M (~$10M per quarter) prior to redeploying proceeds.
Market Valuation Disconnect
Management noted the stock traded at a steep discount to book (cited as ~$0.62 of book value), reflecting investor concern about credit exposure and alternative assets despite strong statutory metrics; this valuation pressure is a potential headwind for shareholder perception.
Alternative Income Sensitivity to Market Conditions
Variable investment income and private asset realizations are sensitive to market activity (IPOs, transaction volume). Management plans conservatism in planning given variability and noted realizations in the PE portfolio have been muted recently, impacting capital generation dynamics.
Company Guidance
Management reiterated guidance to continue shifting to a more fee‑based, higher‑margin, less capital‑intensive model while growing AUM and improving returns: FY‑25 AUM before flow reinsurance was $73.1B (+12% YoY) with retained AUM $57.6B (+7%), $14.6B gross sales ($9.0B core; $5.6B opportunistic), net retained sales $10.0B, and progress toward the 2023 Investor Day targets (AUM +44% from the $51B baseline toward a 50% five‑year goal; ROA and ROE moving toward the lower ends of the 133–155 bps and 13–14% targets). Key operational and capital targets included growing fee‑based earnings from ~15% of adjusted net earnings in 2025 (flow reinsurance fees $56M, owned distribution $47M) to ~25% by year‑end 2028, lowering operating expense to AUM before flow reinsurance from 50 bps (down from 60 bps) to ~45 bps by 2027, reinsuring the vast majority of MYGA while evolving FIA toward ~50/50 retained vs. flow, maintaining debt around a ~25% debt‑to‑capitalization target, holding company cash ~2x interest coverage, sustaining strong statutory capital (company action level RBC ~430% vs 400% target), and executing a transaction expected to deliver ~$300M net proceeds (including a $200M dividend), reduce AUM by ~$1.9B and forego ~ $10M of adjusted net earnings per quarter pre‑deployment; other portfolio metrics noted: Q4 fixed‑income yield 4.65% (+6 bps YoY), alt‑investments annualized ~7% (vs 10% long‑term), floating‑rate exposure ~$2.8B (~5%), prepayment fees $7M pretax Q4 ($56M FY), FY adjusted net earnings $482M ($3.64/share) and Q4 $123M ($0.91/share).F&G Annuities & Life Inc Financial Statement Overview
Summary
Strong cash generation is the key positive (very large, resilient operating and free cash flow), and leverage looks manageable. The offset is volatile profitability, including a sharp net margin drop in 2025 and losses in prior years, which also drove weaker returns on equity.Income Statement
Revenue has grown meaningfully over time (from $1.4B in 2020 to $5.7B in 2025), including solid growth in 2025. However, profitability has been volatile: net margin fell sharply to ~4.6% in 2025 from ~11.8% in 2024, and the company posted losses in 2023 and 2020. The step-down in earnings power and uneven margins weigh on the score despite top-line momentum.56
Neutral
Balance Sheet
Leverage looks manageable for the period shown, with debt-to-equity in the mid-range (~0.47 in 2025, improved from ~0.55 in 2024) and equity building to $4.8B in 2025. Total assets have expanded substantially, supporting scale. The main concern is inconsistency in returns to shareholders: return on equity dropped to ~5.5% in 2025 from ~16.2% in 2024 and was negative in 2023, pointing to earnings volatility against a growing balance sheet.63
Positive
Cash Flow
Cash generation is a clear strength: operating cash flow and free cash flow are very large and closely aligned across years (about $4.7B free cash flow in 2025; ~$6.0B in 2024). Free cash flow has been resilient even through weaker earnings years, and free cash flow is roughly in line with net income when profitable. A modest free cash flow decline in 2025 and some inconsistent coverage figures in the data temper the score, but overall cash flow quality appears strong.78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.73B | 5.42B | 4.27B | 2.24B | 3.38B |
| Gross Profit | 1.77B | 1.63B | 718.00M | 1.11B | 1.45B |
| EBITDA | 1.15B | 1.48B | 474.00M | 1.15B | 1.85B |
| Net Income | 265.00M | 639.00M | -58.00M | 635.00M | 1.24B |
Balance Sheet | |||||
| Total Assets | 98.43B | 85.04B | 70.20B | 54.63B | 48.73B |
| Cash, Cash Equivalents and Short-Term Investments | 54.19B | 48.58B | 43.43B | 33.73B | 31.87B |
| Total Debt | 2.24B | 2.18B | 1.76B | 1.13B | 991.00M |
| Total Liabilities | 93.51B | 80.96B | 67.10B | 52.22B | 44.24B |
| Stockholders Equity | 4.80B | 3.95B | 3.10B | 2.40B | 4.49B |
Cash Flow | |||||
| Free Cash Flow | 4.67B | 5.97B | 5.81B | 3.14B | 1.84B |
| Operating Cash Flow | 4.68B | 6.00B | 5.83B | 3.17B | 1.87B |
| Investing Cash Flow | -8.43B | -7.95B | -8.92B | -9.37B | -6.86B |
| Financing Cash Flow | 2.97B | 2.65B | 3.69B | 5.63B | 5.63B |
F&G Annuities & Life Inc Technical Analysis
Negative
20.69
Price Trends
26.85
Negative
29.12
Negative
30.57
Negative
Market Momentum
-1.74
Positive
24.99
Positive
12.81
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FG, the sentiment is Negative. The current price of 20.69 is below the 20-day moving average (MA) of 24.18, below the 50-day MA of 26.85, and below the 200-day MA of 30.57, indicating a bearish trend. The MACD of -1.74 indicates Positive momentum. The RSI at 24.99 is Positive, neither overbought nor oversold. The STOCH value of 12.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FG.
F&G Annuities & Life Inc Risk Analysis
F&G Annuities & Life Inc disclosed 66 risk factors in its most recent earnings report. F&G Annuities & Life Inc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
F&G Annuities & Life Inc Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $2.81B | 15.25 | 5.75% | 2.91% | -4.58% | ― | |
63 Neutral | $6.20B | 6.91 | 12.03% | 3.93% | 35.76% | 636.97% | |
62 Neutral | $3.75B | 11.12 | 11.12% | 1.54% | -1.61% | 15.79% | |
58 Neutral | $3.14B | 16.56 | 2.86% | ― | 1.41% | 150.35% | |
58 Neutral | $7.40B | 276.83 | 0.26% | 2.98% | 24.94% | ― | |
54 Neutral | $3.45B | 8.55 | 7.20% | ― | 27.71% | ― |
* Financial Sector Average
FG
F&G Annuities & Life Inc
20.69
-20.95
-50.31%
CNO
CNO Financial
39.77
0.40
1.02%
GNW
Genworth Financial
8.10
1.47
22.17%
LNC
Lincoln National
32.59
-1.79
-5.20%
BHF
Brighthouse Financial
60.38
4.78
8.60%
JXN
Jackson Financial Incorporation
104.71
24.06
29.84%
F&G Annuities & Life Inc Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
F&G Annuities Reports Lower Earnings Amid Strategic Reshaping
Negative
Feb 19, 2026
F&G Annuities & Life reported on February 19, 2026 that fourth-quarter 2025 net earnings attributable to common shareholders fell to $124 million, or $0.92 per share, from $323 million a year earlier, with full-year 2025 net earnings down to $248 million from $622 million in 2024. Adjusted net earnings also declined year over year, but the insurer delivered record assets under management before flow reinsurance of $73.1 billion, robust but slightly lower annual sales, strong credit performance, and an estimated 430% RBC ratio, while advancing a shift toward a more fee-based model and returning $137 million to shareholders through dividends.
The company highlighted $14.6 billion of gross sales in 2025, including $9 billion from core products, steady adjusted ROA of 0.87% and adjusted ROE ex-AOCI of 8.2%, and continued cost discipline despite lower alternative investment returns versus long-term expectations. Strategically, F&G moved to sell its Bermuda reinsurance subsidiary, completed a distribution of roughly 12% of its shares by majority owner Fidelity National Financial to FNF shareholders that lifted its public float to 30% while FNF retained about 70% ownership, and emphasized that these capital and ownership actions position the business for long-term growth and improved market liquidity for investors.
The most recent analyst rating on (FG) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on F&G Annuities & Life Inc stock, see the FG Stock Forecast page.
Business Operations and StrategyDividends
F&G Shares Set for Special Distribution to FNF Holders
Positive
Dec 18, 2025
On December 18, 2025, Fidelity National Financial, Inc. (FNF), the majority owner of F&G Annuities & Life, announced that its board had set the final terms for a special stock distribution of F&G shares to FNF investors. The transaction will see FNF distribute 16,280,204 F&G shares—around 12% of F&G’s outstanding stock—to FNF shareholders of record as of 4:30 p.m. ET on December 17, 2025, with distribution scheduled for December 31, 2025. Based on FNF’s 271.3 million shares outstanding on the record date, investors will receive six F&G shares for every 100 FNF shares held, with cash paid in lieu of fractional F&G shares. The move further broadens F&G’s shareholder base while modestly reducing FNF’s majority stake, and the distribution, structured as a taxable dividend for U.S. federal income tax purposes, gives FNF shareholders direct exposure to F&G’s insurance and annuity business without requiring any action or payment on their part.
The most recent analyst rating on (FG) stock is a Buy with a $37.00 price target. To see the full list of analyst forecasts on F&G Annuities & Life Inc stock, see the FG Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.