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Corebridge Financial, Inc. CRBG is supported by rising premiums attributable to a diversified product suite and new business growth. Rising fee income and investment income also bode well. Partnerships, strong segmental contribution and solid cash-generating abilities are additional tailwinds for the stock.

Zacks Rank & Price Performance

Corebridge currently carries a Zacks Rank #3 (Hold).

The stock has gained 59.9% in the year-to-date period compared with the industry’s 22.2% growth. The Zacks Finance sector and the S&P 500 Composite have increased 21.3% and 27.8%, respectively, in the same time frame.

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Favorable Growth Prospects

The Zacks Consensus Estimate for Corebridge’s 2024 earnings is pegged at $4.88 per share, indicating an improvement of 19% from the 2023 metric.

The consensus mark for revenues is $23.3 billion, implying 9.9% growth from the 2023 metric.

Earnings Surprise History

CRBG’s bottom line surpassed earnings estimates in three of the trailing four quarters and missed the mark once, the average surprise being 4.3%.

Solid Return on Equity

The return on equity for Corebridge is currently 23.6%, which is higher than the industry’s average of 14.1%. The figure substantiates the company’s efficiency in utilizing shareholders’ funds.

Key Drivers

The top line of Corebridge is expected to benefit from rising premiums, fees income and net investment income. Premiums, being the most significant contributor to any insurer’s revenues, were at a decade-high of $10.6 billion for CRBG in the first quarter of 2024. This revenue component witnesses steady growth from the traditional life insurance and annuity product suite of CRBG.

A high interest rate environment is translating into higher demand for its annuity products and increased policy sales. High retention rates also contribute to premium growth. Resilient equity markets are expected to push CRBG’s Assets Under Management further, giving rise to improved fee income.

Meanwhile, higher yields earned from the investment portfolio also continue to drive the top-line growth of Corebridge. The company’s enhanced advisory platform provides full-service investment and retirement planning services to long-term clients and their families, thereby fetching an uninterrupted flow of advisory fee income. An aging U.S. population is expected to sustain the solid demand for the retirement planning services provided by CRBG in the days ahead.

Corebridge offers a diversified product and services suite through its Individual Retirement, Group Retirement, Life Insurance and Institutional Markets businesses. The combined expertise of the four business units continues to generate significant cash flows for CRBG. It adds lucrative features and options to its product portfolio, which, in turn, reflects efforts to meet the evolving needs of the customer base. The company recently renamed its Direct-to-Consumer Life Insurance business to Corebridge Direct.

Corebridge pursues tie-ups to enhance its product portfolio and expand its market reach. It also does not shy away from divestitures that release capital and enable CRBG to intensify its focus on core operations. CRBG divested its UK life insurance business to Aviva plc in a bid to focus its resources on Life & Retirement solutions.

The insurer undertakes technology investments, which seem time opportune in light of the widespread adoption of digital means across every sphere of life. Progress in digitizing the advisors’ end-to-end toolkits of CRBG bears testament to one such investment that will inevitably provide seamless interactive experiences, new business, and higher participant enrollment.

In addition to funds received from divestitures, strong cash reserves and operating cash flows equip Corebridge to pursue uninterrupted business investments. It generated operating cash flows of $3.7 billion in the first quarter of 2024.

The financial strength also imparts the power to return more value to shareholders through share buybacks and dividend payments. The company repurchased shares worth $243 million in the first quarter and paid dividends worth $143 million. It also increased its share repurchase authorization by $2 billion. Rising share buybacks may prove to be beneficial for the company as it will help reduce the supply of its shares from the market and provide a return to shareholders.

American International Group, Inc. AIG successfully deconsolidated CRBG from its accounts in May 2024, leading to an excess supply of shares in the market. Its dividend yield of 3.2% remains higher than the industry’s figure of 2.6%. It targets a 60%-65% payout ratio for 2024.

Stocks to Consider

A couple of better-ranked stocks from the finance sector are Coinbase Global, Inc. COIN and EverQuote, Inc. EVER. Coinbase Global presently sports a Zacks Rank #1 (Strong Buy), while EverQuote carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Coinbase Global has a solid track record of beating earnings estimates in each of the last four quarters, the average being 364.6%. In the past year, shares of COIN have skyrocketed 171.6%. The Zacks Consensus Estimate for COIN’s 2024 earnings and revenues indicates a year-over-year increase of 1,840.5% and 92.2%, respectively.

EverQuote’s 2024 earnings and revenue estimates imply a growth rate of 103.3% and 33.9% year over year, respectively. EVER beat estimates in each of the past four quarters, the average surprise being 65.2%. In the past year, shares of EVER have skyrocketed 203%.

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