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Globe Life (GL)
NYSE:GL
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Globe Life
(NYSE:GL)77Outperform
Positive Factors
Business Model
Globe's unique business model, which includes captive agent distribution and a focus on lower-/middle-income consumers, helps insulate it from severe competitive pressures.
Free Cash Flow
Free cash flow conversion is beginning to improve after being pressured over the past decade, with 2025 guidance implying conversion above 50%.
Negative Factors
Regulatory Investigations
Recent DOJ, SEC, and EEOC investigations remain an overhang on the shares.
Globe Life (GL) vs. S&P 500 (SPY)
Market Cap
$10.68B
Dividend Yield0.75%
Average Volume (3M)605.51K
Price to Earnings (P/E)10.7
Beta (1Y)0.68
Revenue Growth6.07%
EPS Growth17.69%
CountryUS
Employees3,636
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)11.95
Shares Outstanding83,848,430
10 Day Avg. Volume671,731
30 Day Avg. Volume605,509
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)N/A
Price to Sales (P/S)1.93
Price to Cash Flow (P/CF)7.90
P/FCF Ratio6.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$134.80Price Target Upside8.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Globe Life Business Overview & Revenue Model
Company DescriptionGlobe Life Inc. is a leading financial services holding company, primarily operating in the life and health insurance sectors. The company, through its subsidiaries, offers a range of insurance products, including life insurance, supplemental health insurance, and annuities. Globe Life focuses on providing affordable coverage options to middle-income families across the United States, leveraging direct-to-consumer marketing strategies and a network of independent agencies to reach its customer base.
How the Company Makes MoneyGlobe Life Inc. generates revenue primarily through the sale of life and health insurance products. The company's key revenue streams include premium income from policyholders and investment income generated from its portfolio of invested assets. Globe Life employs a direct-to-consumer marketing approach, minimizing reliance on traditional brokerage channels, which helps reduce distribution costs and maximize profitability. Additionally, the company benefits from a strong underwriting process, maintaining low policy lapse rates and ensuring stable long-term cash flow. Significant factors contributing to Globe Life's earnings include its focus on serving underserved markets, efficient cost management, and strategic investment decisions that enhance the return on its investment portfolio.
Globe Life Financial Statement Overview
Summary
Globe Life demonstrates strong financial health with consistent revenue growth and a robust net profit margin. The balance sheet stability is underscored by low leverage, though declining equity warrants attention. Cash flow is strong, supporting both operations and investments.Income Statement
Globe Life has shown consistent revenue growth over the years, with a noticeable increase from 2023 to 2024. The net profit margin in 2024 was strong at approximately 18.5%, indicating efficient cost management and profitability. However, the absence of EBIT and EBITDA data for 2024 limits a complete analysis of operational efficiency.85
Very Positive
Balance Sheet
The company exhibits a sound equity position with a debt-to-equity ratio of 0.078, indicating low leverage risk. The equity ratio of approximately 18.2% in 2024 suggests financial stability. However, the decrease in stockholders' equity over the years could be a concern if it continues.75
Positive
Cash Flow
The cash flow position is robust with a stable operating cash flow. The free cash flow has been consistent, although the growth rate reduced from 2022 to 2023. The free cash flow to net income ratio suggests a strong ability to generate cash relative to net income.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.78B | 5.45B | 5.21B | 5.11B | 4.74B | Gross Profit |
| 5.78B | 5.10B | 4.86B | 4.79B | 4.44B | EBIT |
| 0.00 | 1.32B | 996.71M | 911.17M | 895.36M | EBITDA |
| 0.00 | 0.00 | 0.00 | 1.02B | 0.00 | Net Income Common Stockholders |
| 1.07B | 970.75M | 894.39M | 744.96M | 731.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 250.36M | 103.16M | 16.71B | 21.47B | 21.42B | Total Assets |
| 29.08B | 28.05B | 25.54B | 29.77B | 29.05B | Total Debt |
| 415.40M | 2.12B | 2.08B | 2.03B | 1.92B | Net Debt |
| 250.08M | 2.01B | 1.98B | 1.93B | 1.83B | Total Liabilities |
| 23.77B | 23.56B | 20.64B | 21.13B | 20.28B | Stockholders Equity |
| 5.31B | 4.49B | 4.90B | 8.64B | 8.77B |
| Cash Flow | Free Cash Flow | |||
| 1.33B | 1.43B | 1.39B | 1.40B | 1.43B | Operating Cash Flow |
| 1.40B | 1.48B | 1.42B | 1.44B | 1.48B | Investing Cash Flow |
| -641.52M | -926.15M | -943.01M | -913.37M | -1.18B | Financing Cash Flow |
| -715.84M | -541.49M | -492.45M | -523.60M | -274.06M |
Globe Life Technical Analysis
Positive
124.15
Price Trends
118.13
Positive
112.95
Positive
102.33
Positive
Market Momentum
1.97
Positive
54.88
Neutral
63.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GL, the sentiment is Positive. The current price of 124.15 is above the 20-day moving average (MA) of 123.33, above the 50-day MA of 118.13, and above the 200-day MA of 102.33, indicating a bullish trend. The MACD of 1.97 indicates Positive momentum. The RSI at 54.88 is Neutral, neither overbought nor oversold. The STOCH value of 63.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GL.
Globe Life Risk Analysis
Globe Life disclosed 21 risk factors in its most recent earnings report. Globe Life 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
Globe Life Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $10.68B | 10.67 | 20.18% | 0.75% | 6.07% | 17.69% | |
75 Outperform | $13.77B | 8.24 | 16.23% | 2.00% | 4.03% | 45.42% | |
72 Outperform | $20.08B | 13.34 | 14.17% | 3.21% | 18.02% | 171.70% | |
67 Neutral | $6.11B | 1.95 | 39.61% | 4.75% | 47.95% | ― | |
65 Neutral | $55.56B | 13.72 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
61 Neutral | $38.79B | 14.61 | 9.78% | 4.63% | 34.25% | 11.22% |
* Financial Sector Average
Performance Comparison
GL
Globe Life
124.15
-0.96
-0.77%
LNC
Lincoln National
35.88
11.03
44.39%
MET
Metlife
81.56
13.12
19.17%
PFG
Principal Financial
85.62
7.39
9.45%
PRU
Prudential Financial
109.59
5.39
5.17%
UNM
Unum Group
77.91
28.78
58.58%
Globe Life Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 0.88% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with strong growth in life insurance premiums and agent recruitment, alongside robust shareholder returns. However, challenges remain with declining health underwriting margins, ongoing regulatory investigations, and increased expenses.Highlights
Strong Growth in Life Insurance Premiums
Life premiums increased 4% to $823 million, with a 10% increase in life underwriting margin to $336 million. The company expects life premium revenue to grow by 4.5% to 5% in 2025.
Impressive Agent Growth and Sales
American Income Life saw a 7% increase in life premiums and a 22% increase in net life sales, driven by a 7% increase in average producing agent count.
Positive Investment Income Performance
Excess investment income was $38 million, up $3 million from the previous year. Investment income was $282 million, up 4%.
Strong Shareholder Returns
The company repurchased $36 million in shares in the fourth quarter, with a total of $1 billion returned to shareholders in 2024.
Resilient Business Amid Economic Uncertainty
Overall premium growth of 4.7% in 2024 exceeded the 3.4% growth rate in 2023, showing business resilience despite high inflation.
Lowlights
Decline in Health Underwriting Margin
Health underwriting margin declined 6% to $91 million due to higher claim costs resulting from increased utilization.
Challenges in Direct-to-Consumer Sales
Direct-to-consumer life premiums decreased by 1%, with a significant 11% decrease in net life sales, primarily due to reduced marketing spend.
Regulatory Investigations
Ongoing inquiries by the SEC and DOJ with no material developments or claims asserted against the company, creating some uncertainty.
Increased Administrative and Legal Expenses
Administrative expenses rose due to higher IT and legal costs. A notable $12.5 million legal accrual was recorded in the quarter.
Company Guidance
During the Globe Life fourth quarter 2024 earnings call, several key metrics and guidance for 2025 were discussed. Net income for Q4 2024 was reported at $255 million, or $3.01 per share, compared to $275 million, or $2.88 per share, the previous year. Net operating income increased by 12% to $266 million or $3.14 per share. The company expects life premium revenue to grow between 4.5% and 5% in 2025, with a life underwriting margin of 40% to 42% of premium. Health premium revenue is projected to grow 7.5% to 8.5%, with an underwriting margin between 25% and 27%. Administrative expenses for 2025 are expected to be approximately 7.4% of premium. The company's net operating earnings per diluted share for 2025 are estimated to be between $13.45 and $14.05, representing an 11% growth at the midpoint. The investment portfolio yield was noted at 5.27% for the fourth quarter, with plans to invest $900 million to $1.1 billion in fixed maturities with yields of 5.5% to 5.7%. The call also highlighted a focus on share repurchases, with plans to repurchase $600 million to $650 million of stock in 2025.Globe Life Corporate Events
Executive/Board Changes
Globe Life Introduces Executive Severance Plan
Neutral
Nov 19, 2024
Globe Life Inc.’s Board of Directors has introduced the Executive Severance Plan, offering severance benefits to key executives, including Co-CEOs, in cases of employment termination without cause or for good reason. The plan provides cash severance based on salary and bonuses, along with support for health plans and future employment assistance. Amendments to stock options and performance shares ensure vesting aligns with termination conditions, protecting executives during changes in control. Compliance with confidentiality and other provisions is required to maintain benefits.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.