Voya Financial Hits 52-Week High Post ING Stake Sale
Shares of Voya Financial Inc. (VOYA) scaled a new 52-week high to $41.69 on Nov 18, jumping 18% since the beginning of 2014. Notably, the stock consistently surged 99.9% since it began trading from May 2013 onwards, and 5.9% since ING Groep NV (ING) reduced its stake in the company to 19% from 32.5% on Nov 13.
While about 4.0 million shares exchanged hands in the latest trading session, average volume of shares traded over the last three months stands at approximately 2,043.9K. Yesterday’s closing price represents a strong one-year return of 19%, against 14.1% clocked by the S&P 500 index.
Rationale
The steady appreciation in Voya Financial’s stock price is likely being fueled by bullish market sentiment regarding the company’s financial and operational capabilities amid its endeavors to stand independently.
Additionally, this Zacks Rank #3 (Hold) stock has delivered positive earnings surprises in three of the last four quarters, with an impressive average beat of 4.5%. Even third-quarter 2014 operating earnings of 75 cents per share exceeded the Zacks Consensus Estimate by 2.7%. However, it lagged the year-ago quarter figure of $1.08 a share, owing to higher net gain in the year-ago quarter and negative deferred acquisition costs in the reported quarter.
Annualized return on equity (:ROE), a key measure of profitability, rose to 11.2% at Sep 2014-end from 10.7% at Jun 2014-end, thereby steadily advancing toward the targeted 12–13% in ROE by 2016. Additionally, the risk-based capital was pegged at 512%, well above the guided 425%.
A secure capital and adequate liquidity supported accelerated share buybacks worth $325 million during the reported quarter. Of this, shares worth $300 million were repurchased from ING, which raised another $1.4 billion from the sale of 34.5 million Voya Financial shares last week.
Voya Financial also bought back additional shares worth $175 million in the latest sale executed by ING, and now has about $11 million available under the current authorization.
Stocks to Consider
Investors interested in the insurance sector could consider players like American Equity Investment Life Holding Co. (AEL) and Fidelity & Guaranty Life Common (FGL). All these sport aZacks Rank #1 (Strong Buy).
Read the Full Research Report on AEL
Read the Full Research Report on ING
Read the Full Research Report on FGL
Read the Full Research Report on VOYA
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