F&G Annuities & Life, Inc. (NYSE: FG)

Sector: Financial Services Industry: Insurance - Life CIK: 0001934850
Market Cap 3.00 Bn
P/B 0.67
P/E 2.42
P/S 0.75
ROIC (Qtr) 9.79
Div Yield % 0.88
Rev 1y % (Qtr) 17.31
Total Debt (Qtr) 2.24 Bn
Debt/Equity (Qtr) 0.46
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About

F&G Annuities & Life, Inc., often referred to as F&G, is a prominent player in the insurance solutions industry, providing services to both retail and institutional clients. The company's mission is to assist individuals in transforming their aspirations into reality, with approximately 677,000 policyholders as of December 31, 2023, relying on its fixed annuity and life insurance products for safety and protection. F&G's primary business activities revolve around offering a diverse range of products and services. These include fixed indexed annuities...

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Investment thesis

Bull case

  • Strong operating cash flow of 4.83B provides robust 2.16x coverage of total debt 2.24B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 87.86B provides 39.29x coverage of total debt 2.24B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 4.83B provides exceptional 1208.25x coverage of minority interest expenses 4M, showing strong core operations.
  • Operating cash flow of 4.83B provides exceptional 30.02x coverage of interest expenses 161M, showing strong debt service capability.
  • Operating cash flow of 4.83B provides strong 161.10x coverage of stock compensation 30M, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 4.83B barely covers its investment activities of (8.95B), with a coverage ratio of -0.54, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 4.83B provides thin coverage of dividend payments of (131M) with a -36.89 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 2.19B provide limited coverage of acquisition spending of (1.14B), which is -1.92x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 731M show weak coverage of depreciation charges of 643M, with a 1.14 ratio indicating high capital intensity and potential reinvestment needs.
  • Retained earnings of 2.48B provide limited buffer against comprehensive income items of (1.38B), which is -1.80x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Insurance - Life
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MET Metlife Inc 81.60 Bn 15.56 1.20 20.23 Bn
2 AFL Aflac Inc 78.90 Bn 18.62 3.49 8.69 Bn
3 MFC Manulife Financial Corp 63.37 Bn 16.53 2.20 10.71 Bn
4 PUK Prudential Plc 38.02 Bn 21.76 0.58 -
5 PRU Prudential Financial Inc 36.75 Bn 10.28 0.60 32.56 Bn
6 PRI Primerica, Inc. 19.72 Bn 133.62 17.82 0.65 Bn
7 UNM Unum Group 18.81 Bn 64.52 1.80 3.77 Bn
8 GL Globe Life Inc. 14.78 Bn 13.56 2.87 2.71 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.03 0.25
EV to Cash from Ops. EV/CFO 1.79 38.74
EV to Debt EV to Debt 1.50 4.98
EV to EBIT EV/EBIT 2.11 18.23
EV to EBITDA EV/EBITDA 1.81 14.59
EV to Free Cash Flow [EV/FCF] EV/FCF 1.82 34.05
EV to Market Cap EV to Market Cap 1.12 1.00
EV to Revenue EV/Rev 0.84 2.53
Price to Book Value [P/B] P/B 0.67 2.19
Price to Earnings [P/E] P/E 2.42 26.16
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.02 3.59
Dividend Payout Ratio % Div Payout % (Qtr) 25.20 22.49
Dividend per Basic Share Div per Share (Qtr) 0.88 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 2.43 0.41
Interest Coverage Int. cover (Qtr) 4.54 7.54
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 32.00 -27.98
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -38.15 19.69
Dividend Growth (1y) % Div 1y % (Qtr) 4.76 15.89
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 608.60 89.68
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 115.99 64.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 576.85 82.78
EBT Growth (1y) % EBT 1y % (Qtr) 4,850.00 344.70
EPS Growth (1y) % EPS 1y % (Qtr) 34,800.00 2,261.01
FCF Growth (1y) % FCF 1y % (Qtr) -29.96 186.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 67.90 50.91
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.06 0.13
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.12
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.46 0.49
Interest Cover Ratio Int Coverage (Qtr) 4.54 7.54
Times Interest Earned Times Interest Earned (Qtr) 4.54 7.54
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 24.90 15.04
EBIT Margin % EBIT Margin % (Qtr) 13.23 14.45
EBT Margin % EBT Margin % (Qtr) 10.32 12.36
Gross Margin % Gross Margin % (Qtr) 33.60 45.61
Net Profit Margin % Net Margin % (Qtr) 8.10 10.89