iShares US Financials
Latest iShares US Financials News and Updates
The Great American Deleveraging: Fact or Myth?
The great American deleveraging has largely been limited to the financial sector (XLF) (IYF). Non-financial debt is still much higher than historical averages.
Blackstone, Carlyle, and KKR Saw Real Estate Growth in 3Q16
The real estate space has seen a relatively strong performance when compared to other asset classes.
A Look at Capital One’s Valuations
Capital One Financial Corporation’s (COF) PE (price-to-earnings) ratio is 8.77x on an NTM basis compared to its competitors’ average PE ratio of 20.79x.
Factors That Will Drive Goldman Sachs’ Earnings in 2016
Goldman Sachs derives 16% of its revenues from the investing and lending business. So far, 2016 has been a rough year for the financial sector.
How Wells Fargo Creates Value for Shareholders
Wells Fargo has consistently performed well in stress tests. This performance has let the company increase its dividends annually.
What Impacted Wells Fargo’s First Quarter Earnings?
Wells Fargo’s first quarter earnings surpassed expectations but fell 5% YoY (year-over-year). The net interest income increased by 6% to $11.7 billion.
What Do Analysts Recommend for JPMorgan Chase and Wells Fargo?
In a Bloomberg survey of 37 analysts, 19 analysts (51%) have assigned a “buy” rating to Wells Fargo (WFC) while 13 (35%) have rated it as “hold.” The stock currently has five “sell” ratings.
Blackstone’s Real Estate Growth in Europe and Asia in 2017
The Blackstone Group (BX) garnered realizations of $3.5 billion in 4Q16, reflecting a year-over-year rise in improved valuations.
How Did Bank of America Perform on 2016 Stress Tests?
Bank of America boosted its dividends by 50% to $0.075 after it cleared the Fed’s 2016 stress tests.
KKR Realized Performance, Investment Income Declined in 1Q16
In 1Q16, KKR & Co. (KKR) saw its distributable earnings decline on lower bookings. The company made realized performance income of $99 million compared to $308 million in 1Q15.
Carlyle’s Portfolio Appreciated on These
Carlyle managed 5% appreciation in portfolio valuation in 4Q16 and 12% in fiscal 2016, reflecting an improved YoY performance.
Leading Players in the US Annuity Industry
The market leader in the fixed annuity industry is Allianz Life Insurance Company of North America with 13% market share, followed by New York Life with 8%.
KKR Achieves Higher Realization on Improved Activity in 2Q16
In 2Q16, KKR & Co. (KKR) saw its distributable earnings surge on exit activity in the private equity space. The company made realized performance income of $310 million compared to $258 million in 2Q15.
Rich Valuations and Higher Rates Lead to Poor Stock Returns
Rich valuations and higher rates are a lethal combination for stocks. Over the longer term, multiple expansion and tightening lead to negative returns.
Carlyle Group’s Private Equity Portfolio Has Risen in 1Q16
Carlyle’s total carry fund valuations rose by 2% in 4Q15, led by a recovery in the valuations of private equity funds.
KKR Expected to See Subdued Realized and Investment Performance
In 1Q16, KKR & Co. (KKR) saw its distributable earnings decline due to lower bookings. The company had a realized performance income of $99 million.
How Did KKR’s Distributions Look in 4Q16?
KKR & Company (KKR) has managed higher realizations over the past few quarters as reflected in its higher distributions to limited partners or investors.
Why Stanley Security Changed Gears
Profit margins in Stanley Security increased from 10.2% in 2013 to 11.4% in 2015.
Carlyle’s Portfolio Could Continue on a Subdued Trajectory in 2Q16
Carlyle’s performance is directly impacted by the global macroeconomic environment as well as financial conditions in and outside of the United States.
How Did Greece Get Here? The Origins of the Crisis
Crisis has embroiled Greece for more than half a decade. The once prosperous economy has been reduced to shambles and is teetering on the verge of bankruptcy. How did Greece get here?
What Led to Chubb’s Discounted Valuations?
Chubb has been successful in gaining investors’ confidence as the company rewarded shareholders with $667 million in 2Q17 via repurchases and dividends.
Why should you invest in insurance ETFs?
Insurance ETFs are poised to gain from industry growth. As interest rates improve, insurers should see better earnings due to higher investment returns.
Buffett Banking Too Much on the Banking Sector with J.P. Morgan?
As we discussed in the last three parts of this series, renowned billionaire investor Warren Buffett’s Berkshire Hathaway (BRK.A)(BRK.B) has increased its bets on the banking sector.
Buffett Raised Bets on U.S. Bancorp and Goldman Sachs in Q3 2018
So far in this series, we’ve looked at Warrant Buffet’s investment firm, Berkshire Hathaway’s (BRK.A)(BRK.B), top five investments in the third quarter.
Improving Economy and Retail Sales to Boost Mastercard’s Q3 Results
A healthy job market and a steady hike in wages have increased the spending power of consumers.
Visa’s Q4 Results to Gain from Improving Economy and Retail Sales
The US GDP grew 4.2% in the second quarter, which was almost double the 2.2% increase registered in the first quarter.
Mastercard to Gain from Improving Economy and Rising Retail Sales
The Consumer Confidence Index increased to 133.4 in August from 127.9 in July—its highest reading since its October 2000 reading of 135.8.
Improving GDP and Retail Sales Could Boost Visa’s Platform Usage
Improving GDP growth, a healthy job market, and steady wage growth have increased the disposable income of consumers, thereby giving them greater spending power.
Will Analysts Stay Optimistic about Visa Stock?
In the fiscal third quarter, Visa (V) witnessed strong growth on a YoY (year-over-year) basis in all its primary business metrics.
What Fueled Visa’s Payment Volumes in Fiscal Q3 2018?
In the third quarter, Visa (V) witnessed a rise in payment volumes from the United States on a sequential basis from 10.1% to 10.5%.
How Analysts Rate Mastercard
Analysts’ rating on Mastercard (MA) improved in July compared to June.
Understanding Visa’s Take on Contactless Payments
Visa (V) has been making efforts to increase the use of contactless payments in the United States after experiencing a positive response.
Mastercard Has Premium Valuations after Strong Q2 2018 Results
Mastercard (MA) has a price-to-earnings ratio of 28.04x on an NTM (next-12-month) basis compared to the peer average of 15.95x.
Understanding Visa’s Views on Europe and India
Visa (V) posted total payment volumes amounting to $2.1 trillion in its fiscal third quarter.
How Mastercard’s Gross Dollar Volumes and Net Revenues Trended
In the second quarter, Mastercard (MA) witnessed total gross dollar volumes (or GDV) of $1.5 trillion.
Fintech Startups Grabbed a Larger Share of US Personal Loans
The total spending on Visa’s (V) network rose 11% to $2.1 trillion in the second quarter—slightly better than analysts’ estimates of $2.09 trillion.
Discover Financial’s Q2 2018: Total Loans Grew 9% Year-over-Year
On July 26, Discover Financial Services (DFS) released its earnings report for the second quarter.
Visa Posts Strong Fiscal Q3 2018 Results: Payments Volume Rose
On July 25, Visa (V) posted its third fiscal quarter results. The company posted an EPS of $1.20, which exceeds Wall Street analysts’ expectations.
Visa’s Payments Volumes Could Fuel Its Growth
On July 25, Visa (V) is scheduled to report its results for the third fiscal quarter. Analysts expect Visa to post an EPS of $1.09.
Mastercard’s Q2 Preview: Spending, Macro Data Could Be Drivers
Mastercard (MA) is set to release its second-quarter earnings report on July 26. What can we expect?
Capital One’s Net Interest Margin Fell in the Second Quarter
Capital One Financial (COF) posted second-quarter results on July 19.
American Express in Q2: Drivers Could Be Loan Growth, Spending
On July 18, American Express (AXP) is expected to report its Q2 2018. Analysts expect EPS to be $1.82 compared to $1.86 in the first quarter.
Capital One’s Q2: Expectations Amid Trade Wars, Improved Economy
Capital One (COF) is expected to release its Q2 2018 earnings on July 19. Analysts expect EPS of $2.68, a YoY rise of 38.1%.
What Factors Could Influence Analysts’ Ratings on Discover?
Growing trade tensions are a primary concern, as they could impact the performances of Discover Financial Services (DFS) and its peers.
What Discover Financial Has in Mind Moving Forward
Discover Financial Services (DFS) generated net interest income amounting to $2.1 billion in the first quarter.
What’s behind Mastercard’s Co-Brand Wins?
The economic and business environment prevailing in an economy affects the business fundamentals of payment processing giants like Visa (V) and Mastercard (MA).
How Analysts View American Express Stock
In June, eight of the 32 analysts covering the stock have given it a “buy” rating, and two analysts have given it a “strong sell.”
American Express Global Commercial Services: What Could Impact It
American Express’s (AXP) Global Commercial Services segment’s non-interest revenues rose 9% YoY in the first quarter.
American Express: What the Second Quarter Holds
The second quarter could be beneficial for American Express (AXP) due to an expected rise in consumer loans and transactions.
Understanding Visa’s Service Revenue and Visa Direct
In fiscal Q3 2018, Visa’s (V) service revenue could rise YoY (year-over-year) due to its payment volumes rising YoY in fiscal Q2 2018.
What to Expect from Berkshire Hathaway’s 1Q18 Earnings
In this series, we’ll look into Berkshire Hathaway’s 1Q18 expected divisional performance along with a variety of other factors.
Improving Operating Leverage Is Key for Bank of America in 2018
Bank of America’s (BAC) spending on technology has increased substantially in recent quarters to improve trading, banking penetration, and wealth services.
Underwriting May Help Berkshire’s Insurance Division
Claims could subside The insurance sector (IYF) faced headwinds and losses in 3Q17 due to hurricanes across the US East Coast. Berkshire Hathaway (BRK.B), AIG (AIG), Prudential Financial (PRU), MetLife (MET), and other reinsurers faced headwinds and underwriting losses in 3Q17, which were partially offset by gains from debt and equity investments. In 4Q17, claims are […]
Major Drivers That Could Impact Bankers in 2018
Banks (IYF) have enjoyed strong credit growth amid near-zero interest rates as leveraging and carry trade have been profitable.
Citigroup’s Global Consumer Banking Sees Rise in Credit Costs
Citigroup’s (C) Consumer Banking segment saw a 3% growth in revenues to $8.4 billion in 3Q17.
Insurance Claims Dent Berkshire’s Profitability in 2017
Berkshire Hathaway (BRK.B) reported losses before tax of $963 million in 3Q17 compared to earnings before taxes of $1.4 billion in the corresponding period last year.
Why Bank Trading Activity Could See Volatility in 2018
Bankers have seen subdued trading activity over the past couple of quarters after a record 2016 and 1Q17.
This Could Be a Key Driver for US Banks in 2018
NIMs (net interest margins) for commercial banks have grown at a faster pace over the past couple of years, resulting in higher net interest income.
Trading to Weigh on Wells Fargo and Other Bankers in 4Q17
Wells Fargo (WFC) missed analysts’ EPS estimate in 3Q17, mainly due to a $1 billion charge for litigation related to its mortgage business pre-2007.
Analysts Are Predicting the Worst Is Over for Wells Fargo
Wells Fargo (WFC) has seen a marginal improvement, with “underperform” ratings declining from five to four and “hold” ratings increasing from 13 to 15.
What Berkshire’s Insurance Business Expects for 3Q17
Berkshire Hathaway Insurance segment is expected to see a YoY rise in revenues due to the sale of policies in automotive, property, and reinsurance offerings.
Understanding Chubb’s North America Agricultural Insurance Division
Chubb’s North America Agricultural Insurance division generated underwriting income of $116.0 million in 1H17 compared to $67.0 million in 1H16, which implies an increase of 73.1%.
What Happened with Chubb’s Life Insurance Division?
In 1H17, Chubb Limited’s (CB) Life Insurance business reported income of $114.0 million in 1H17 compared to $134.0 million in 1H16, reflecting a 14.9% decline.
Inside Chubb’s Overseas General Insurance Division
Chubb’s Overseas General Insurance Division generates the majority of its net premiums written from Latin America, Europe, and Asia.
Why Chubb’s Personal Insurance Business Saw a Rise in Income
Chubb Limited’s (CB) Personal Property and Casualty business’s underwriting income rose from $138.0 million in 1H16 to $285.0 million in 1H17, reflecting an increase of 106.5%.
Chubb’s Net Investment Income Rose in 1H17
Chubb Limited (CB) reported net investment income of ~$1.5 billion in 1H17 compared to ~$1.4 billion in 1H16, reflecting a 9.6% increase. CB generated an 11% return on equity on a trailing-12-month basis.
What Could Drive AIG’s Performance in the Future?
According to Brian Duperreault, chief executive officer of American International Group (AIG), a company in any industry has to take the digitization path for long-term growth and success.
Understanding AIG’s Reshuffling and Technology Initiatives
Brian Duperreault, chief executive officer of American International Group (AIG), has taken a major step by reshuffling the company into three units.
AIG in 3Q17: What We Can Expect
American International Group (AIG) is expected to announce its earnings for 3Q17 on November 2, 2017. Wall Street analysts have provided a high estimate of $0.90 for AIG’s 3Q17 EPS.
Berkshire Hathaway’s Insurance: What to Expect amid Rising Claims
Berkshire Hathaway (BRK.B) saw subdued profits in its Insurance segment in 2Q17, mainly due to higher claims. The trend is set to get stronger in the second half of 2017
Will the Rate Hike Possibility Have Any Impact on Equity Markets?
Interest rates and equity markets usually have an inverse relationship.
How Realty Income’s Dividend Yield Looks
Revenue and earnings Realty Income (O), a retail REIT engaged in US real estate investment, recorded 8% revenue growth in 2016, compared with 10% growth in 2015. The growth was driven by rentals and tenant reimbursements. Its operating costs and other expenses (including interest expenses) rose 6% in 2016 and 8% in 2015. Its gains on asset […]
Weighing Chubb’s Valuation beside Those of Other Insurance Giants
Chubb’s one-year forward PE ratio stands at 13.15x, compared with the peer average of 12.09x, which means that Chubb is trading at a premium valuation.
Where MetLife’s Expected Total Dividend for 2017 Stands next to Allstate’s
In 2017, MetLife (MET) is expected to declare a total dividend of $1.61 per share, representing an increase of 1.9% from the total dividend it declared in 2016.
What Else Could Make This an Expensive Year for Insurance Giants?
US insurance giants (IYF) are expected to witness costs in the range of $20 billion–$65 billion stemming from the effects Hurricane Irma.
Insurance after Harvey and Irma
Hurricane Harvey devastated Houston in late August 2017, causing damages totaling $180 billion, but Irma could be even more expensive.
What’s Happening with AIG’s Commercial Insurance Division?
From January 2016–June 2016, AIG managed to report total operating revenues of $10.8 billion—a 15% YoY fall, primarily due to lower premiums in 1H17.
These Insurance Giants Have Seen Declines in Their Total Revenues
In 1H17, Prudential Financial (PRU) generated total revenues of $27.1 billion—a year-over-year decline of ~5.8%.
Why Wells Fargo’s Spending Is Rising amid Subdued Income Levels
Wells Fargo (WFC) has continued to spend on employee expenses, FDIC, equipment, and other services amid declining non-interest income and marginal growth of interest income driven largely by rate hikes.
What Led to Chubb’s Premium Valuations?
Wall Street analysts have given a one-year price target of $157.53 on Chubb (CB), an increase of 11.4% from the current price level.
How Chubb’s Life Insurance Division Fared
Chubb’s (CB) life insurance division has posted net premiums written of $523 million in 2Q17 as compared to $527 million in 2Q16.
How Chubb’s Overseas General Insurance Division Performed
Chubb’s (CB) Overseas General Insurance division saw a decline in its net premiums written in 2Q17 from $2.01 billion as compared to $2.03 billion in 2Q16.
Why Chubb’s Global Reinsurance Division’s Income Rose
Chubb’s (CB) global reinsurance division has witnessed a substantial fall in its net premiums written in 2Q17 as compared to 2Q16.
How CB’s North America Agricultural Insurance Division Fared
Chubb’s (CB) North America Agricultural Insurance division witnessed a rise of 7.7% in its net premiums written in 2Q17 as compared to 2Q16.
How CB’s North America Personal Property Insurance Segment Performed
Chubb Limited (CB) has witnessed a rise of 2.0% in its net premiums written in 2Q17 as compared to 2Q16.
How Chubb’s North American Commercial Property Segment Performed
Chubb’s (CB) North America Commercial Property and Casualty Insurance division witnessed a marginal fall in its net premiums written in 2Q17 as compared to 2Q16.
Chubb Beat EPS Estimates but Missed Revenue Estimates
Chubb (CB) reported earnings per share (or EPS) of $2.50 in 2Q17, which beat Wall Street analyst estimates of $2.47.
Bank of America to Return $17 Billion to Shareholders
Bank of America (BAC) is planning a payout of $17.0 billion, forming ~7.2% of the total market cap, over the next four quarters.
Analysts’ ‘Hold’ Ratings on Prudential Financial amid Lower Valuations
Prudential Financial (PRU) is covered by 17 analysts. Four of these analysts rated the stock as a “strong buy,” and two analysts gave a “buy” rating on the stock.
Prudential’s Discounted Valuations in 2Q17
Wall Street analysts recommended a one-year price target of $116.07 per share on Prudential Financial (PRU), reflecting an increase of ~14.1% from the current price.
A Look at Prudential Financial’s Dividends in 2017
In 2016, Prudential Financial (PRU) declared total dividends of $2.80 per share. In 2017, the company is expected to declare total dividends of $3.06 per share.
Insights into Prudential’s International Insurance Division
Prudential Financial’s (PRU) Life Planner division experienced an increase in its earnings in 2Q17 compared to 2Q16.
How Wall Street Analysts View AIG
American International Group (AIG) is covered by 18 analysts, out of which seven analysts gave “strong buy” ratings on the stock.
Understanding Prudential’s Group Insurance and Individual Life Earnings
In 2Q17, on the basis of annualized new business premiums, sales in Prudential’s Individual Life business stood at $153 million, reflecting a marginal decline of ~3.8% year-over-year.
Why AIG Discounted Its Valuations in 2017
Wall Street analysts have given a one-year price target of $70.00 on American International Group (AIG), which reflects an ~14.1% increase from the current price.
Why Earnings Rose in Prudential’s Asset Management Business
In 2Q17, earnings from Prudential’s asset management business stood at $218 million compared to $207 million in 2Q16.
Insights on AIG’s Share Repurchases
In 2Q16, AIG reported operating general operating expenses (or GOE) of $2.4 billion, which the company reduced by $191.0 million. It reported GOE of $2.2 billion in 2Q17.
Analyzing Prudential’s Individual Annuities and Retirement Businesses
After excluding market-driven and discrete items, earnings from Prudential Financial’s individual annuities stood at $512 million in 2Q17 compared to $375 million in 2Q16.
Understanding AIG’s Dividend Distribution in 2017
AIG is expected to declare dividends of $1.33 per share in 2017, reflecting a rise of ~38.5% from the total dividends declared in 2016.
Prudential Misses Earnings Estimates, Net Income Falls Year-over-Year
In 2Q17, Prudential Financial (PRU) reported 2Q17 net income of $491 million compared to $921 million in 2Q16. Its 2Q17 earnings per share of $2.09 missed the estimate of $2.70.