Lower valuation multiple
The spin-off of BrightHouse Financial (BHF) has led to substantial separation expenses, which could be the reason for MetLife’s discounted valuation. However, it may still have long-term potential thanks to its focus on rewarding shareholders.
Hurricanes and book value per share
In its property and casualty business, MetLife witnessed pre-tax gross losses from Hurricanes Irma and Harvey of ~$65 million in 3Q17, and its book value per share fell 25% year-over-year to $51.83, mainly because of the BrightHouse Financial spin-off.
On October 24, 2017, MetLife declared a quarterly dividend of $0.40 per share, to be paid on December 13, 2017. Its quarterly dividends have been flat over the last few quarters. Whereas MetLife has a last-12-month price-to-book ratio of 0.99x, peers CNO Financial Group (CNO), Arch Capital Group (ACGL), and Reinsurance Group of America (RGA) have ratios of 0.87x, 1.4x, and 1.3x, respectively.