VOYA Stock Trading at a Discount to Industry at 1.12X: Time to Buy?

Voya Financial, Inc. VOYA shares are trading at a discount compared with the Zacks Life Insurance industry. Its forward price-to-earnings multiple of 1.12X is lower than the industry average of 1.92X, the Finance sector’s 4.17X, and the Zacks S&P 500 Composite’s 8.58X. The insurer has a Value Score of B.

Shares of Brighthouse Financial, Inc. BHF, Reinsurance Group of America, Incorporated RGA and Manulife Financial Corp MFC are also trading at a discount to the industry average.

The insurer has a market capitalization of $7.10 billion. The average volume of shares traded in the last three months was 0.7 million.
Voya Financial has been trading above its 200-day simple moving average (SMA), signaling a short-term bullish trend.

VOYA’s Price Performance

Shares of this life insurer have gained 7% in the year to date, outperforming the industry’s growth of 0.5%.

VOYA’s Growth Projection Encourages

The Zacks Consensus Estimate for Voya Financial’s 2025 earnings per share indicates a year-over-year increase of 42.7%. The consensus estimate for revenues is pegged at $1.29 billion, implying a year-over-year improvement of 20.2%.  

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 16% and 8.3%, respectively, from the corresponding 2025 estimates.  

Earnings have grown 12.2% in the past five years, better than the industry average of 7.8%. The expected long-term earnings growth rate is 15.3%, outperforming the industry average of 12.2%.

Optimistic Analyst Sentiment on VOYA

Three out of the five analysts covering the stock have raised estimates for 2025, while four analysts have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 0.8% and 1.2% north, respectively, in the last 30 days.

Key Points to Note for VOYA

VOYA’s earnings are driven by its solid segmental performances across Wealth Solutions, Investment Management and Health Solutions. These businesses reflect higher-growth, capital-light and higher-return units, boasting the company’s solid presence in the market.

The Wealth Solutions segment is steadily witnessing significant growth on the back of continued strength in underlying business results, higher surplus income, lower credited interest, improved investment income, weaker fee-based margin, a favorable change in deferred acquisition costs and value of business acquired and lower administrative expenses. In Wealth Solutions, full-service recurring deposits should continue to gain from growth in the corporate markets. 

The Investment Management segment should benefit from higher investment capital returns due to its overall market performance and improved fee revenues, driven by higher average equity markets and positive net flows.

VOYA is constantly taking strategic steps to ramp up growth in its Investment Management segment. Voya Financial and Allianz Global Investors inked a long-term strategic partnership that added scale and diversification to Voya Investment Management. 

The Health Solutions segment of the insurer is likely to benefit from growth across all product lines as well as favorable retention.

The insurer’s capital levels remain strong. Voya Financial expects to deliver improved excess capital generation in 2025. This will be driven by Stop Loss repricing, the OneAmerica acquisition, and continued profitable growth across businesses. Voya Financial expects these actions will increase excess capital generation by approximately $100 million in 2025. In 2026, Voya Financial expects a further increase in excess capital generation as the company restores Stop Loss to target margins and benefit from continued profitable growth across businesses. Voya Financial’s financial flexibility provides strength to the company. Voya Financial continues to demonstrate strong excess capital generation and high free cash flow conversion in line with the targets for 2024.

VOYA’s Wealth Distribution

Operational excellence has been helping the company deploy capital to enhance shareholders’ value. Beginning in the third quarter of 2024, Voya Financial increased the quarterly dividend by 12.5%. The balance sheet is well-positioned and was strengthened by the approximately $200 million of excess capital it generated in the quarter. The company has generated approximately $400 million of capital year-to-date above the 90% target. In the third quarter, Voya Financial will resume share repurchases targeting $200 million in the second half of 2025.

Conclusion

Voya Financial is well-positioned for growth on improved investment income, higher average equity markets and positive net flows, favorable retention, as well as strategic partnerships. It should continue to benefit from financial flexibility and effective capital deployment.
Coupled with the impressive dividend history, solid growth projections, optimistic analyst sentiment, as well as attractive valuations, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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