F&G Annuities & Life has had a tough run in 2024, and the slump is pushing investors to ask whether the current share price still lines up with the returns the insurer earns on its capital base. With sentiment under pressure, the key issue is how efficiently F&G Annuities & Life is turning policyholder float and shareholder equity into profitable business.
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The stock is down 27.8% year to date, which puts fresh focus on whether the market is reassessing the value of the returns the business generates on its invested capital.
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For a life and annuities provider that leans heavily on investment income and underwriting discipline, even small shifts in return on capital can influence how investors think about the durability of its earnings power.
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Prefer to judge F&G Annuities & Life on earnings? See what F&G Annuities & Life’s 7.1x P/E says about the price.
For investors, the debate is whether the price you see today is adequately supported by the returns F&G Annuities & Life earns on the capital it deploys into its annuity and life portfolios.
If you want to test this same question about the returns companies earn on their capital across a wider set of insurers and financials, it is worth scanning the 34 high quality undervalued stocks.
Is F&G Annuities & Life a Bargain on Excess Returns?
The Excess Returns model looks at how effectively F&G Annuities & Life turns equity into earnings above its own funding cost. For this insurer, the framework leans on a book value of $35.20 per share and a stable EPS estimate of $2.37 per share, both anchored in the median experience of the past 5 years. The implied cost of equity sits at $2.34 per share, which leaves an excess return of $0.02 per share and aligns with an average return on equity of 7.31%.
Those inputs point to a franchise that is earning just above its hurdle rate, with the model assuming a stable book value of $32.39 per share over time rather than rapid expansion. Even with that restrained outlook, the Excess Returns output suggests an intrinsic value that is substantially above the current share price of $21.70. This implies the market is applying a sizable caution discount to F&G Annuities & Life today. Find out what F&G Annuities & Life could be worth using our Excess Returns estimate.
The F&G Annuities & Life Narrative: What Would Justify Today’s Price?
Narratives on Simply Wall St pick up where the F&G Annuities & Life valuation puzzle leaves off by spelling out which paths for future growth, profitability and earnings would need to hold for the shares to be worth significantly more or less than today. Each scenario ties a fair value to a specific storyline about F&G Annuities & Life’s potential catalysts and key risks so you can track over time which version of events appears to be unfolding on the Community page.
