News Update: MetLife Stock Could Move into the 50s Over Next Two Years
July 16th, 2010
MetLife (MET), the largest life insurer in the US and Mexico, with $539 billion in assets, might have written the right policy to ensure future growth. And that could lift its stock into the 50s over the next two years from its current 41, says a feature in this week’s Barron’s. MET is buying American International Group’s (AIG) second-largest foreign life-insurance unit, American Life Insurance, known as Alico, for $15.5 billion in cash and stock. Alico will add 20 million customers to MetLife’s 70 million and thrust MetLife into the profitable Japanese market and into fast-growing China and Brazil. When the transaction closes at the end of this year, the percentage of operating profits that MetLife gets abroad will double, to 40%. Alico could add as much as 55 cents a share to MetLife’s earnings next year and boost its return on equity well past 12% over the next couple of years, from 7% in 2009.
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