Voya Financial Trading at Discount to Industry at 1.05X: Time to Hold?

Core Viewpoint - Voya Financial has demonstrated strong earnings growth and solid segmental performance, positioning itself favorably in the market despite recent stock price declines compared to industry peers [2][4][6]. Financial Performance - Voya Financial's earnings grew by 16.2% over the last five years, significantly outperforming the industry average of 4.6% [2]. - The company has a solid track record of beating earnings estimates, with an average surprise of 6.77% over the last four quarters [2]. - Despite a 4.4% decline in share price over the past six months, the industry has seen a growth of 13.6% [2]. Segment Performance - The Wealth Solutions segment is experiencing significant growth due to strong underlying business results, higher surplus income, and lower administrative expenses [5]. - The Investment Management segment is expected to benefit from improved fee revenues and higher investment capital returns [7]. - The Health Solutions segment is likely to see growth across all product lines, aided by favorable retention and the Benefitfocus acquisition [9]. Valuation Metrics - Voya Financial shares are trading at a forward price-to-book value of 1.05X, lower than the industry average of 1.96X and the Finance sector's 3.99X [6]. - The company has a Value Score of A, indicating attractive valuation compared to peers [6]. Strategic Initiatives - Voya Financial has entered a long-term strategic partnership with Allianz Global Investors to enhance its Investment Management segment [8]. - The company plans to return $800 million in excess capital to shareholders in 2024, with a recent increase in quarterly dividends by 12.5$1.4 billion, a 75.7% increase year over year, providing financial flexibility [12]. Long-term Outlook - Favorable retention, effective capital deployment, and strong underlying business results are expected to support Voya Financial's growth in the long term [14].