GL Outperforms Industry, Trades at a Discount: How to Play the Stock

Shares of Globe Life Inc. GL have gained 18.1% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 4.3%, 14.1% and 18.1%, respectively. 

The insurer has a market capitalization of $11.32 billion. The average volume of shares traded in the last three months was 0.5 million.

Globe Life surpassed earnings estimates in three of the last four quarters and missed in one, the average being 0.65%.

GL Trading Above 50-Day and 200-Day Moving Averages

Shares of Globe Life closed at $139.82 on Thursday and are trading above the 50-day and 200-day simple moving averages (SMA) of $136.38 and $131.36, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

GL Shares are Affordable

Globe Life shares are trading at a discount compared to the industry. Its forward price-to-earnings multiple of 9.26X is lower than the industry average of 12.39X, the Finance sector’s 17.23X and the Zacks S&P 500 Composite’s 23.38X. Also, it has a Value Score of A.

Shares of other insurers like Unum Group UNM are also trading at a discount to the industry average, while AMERISAFE, Inc. AMSF and Aflac Incorporated AFL are trading at a multiple.

GL’s Growth Projection Encourages

The Zacks Consensus Estimate for Globe Life’s 2026 earnings per share and revenues indicates an increase of 3.1% and 5.1%, respectively, from the corresponding 2025 estimates. 
Earnings have grown 13.3% in the past five years, better than the industry average of 5.5%.

Target Price Reflects Potential Upside

Based on short-term price targets offered by 12 analysts, the Zacks average price target is $167.33 per share. The average indicates a potential 17.5% upside from the last closing price.

GL’s Return on Capital

GL’s trailing 12-month return on equity is 21.8%, ahead of the industry average of 14.9%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders. 

Also, the return on invested capital (ROIC) in the trailing 12 months was 12.9%, better than the industry average of 7.2%. Its ROIC has been increasing over the last few quarters amid capital investment made over the same time frame. This reflects the company’s efficiency in utilizing funds to generate income.

Key Points to Note for Globe Life

Globe Life has been witnessing a positive trend in revenues, driven by premium growth in its Life Insurance and Health Insurance segments and net investment income. 

The strong performance of the American Income and Liberty National divisions should drive the top line in the future. Liberty National is likely to continue to benefit from improved productivity and agent count. GL’s expansion initiatives to capture heavily populated and less penetrated areas should drive growth in the future. 

Globe Life expects net life sales to increase around 3% at American Income, around 1% at Liberty National, and nearly 4% at direct-to-consumer in 2025. The company expects Net health sales to remain flat at Liberty National, to increase around 13% at Family Heritage, and around 50% at United American in 2025.

For net life sales, Globe Life expects American Income to have mid-single-digit growth, Liberty National to have high single-digit growth, and direct-to-consumer to have low single-digit growth for 2026. For net health sales, Globe Life expects Liberty National to have high single-digit growth, Family Heritage to have low double-digit growth, and United American to have mid-single-digit growth for 2026.

Moreover, net investment income continues to be another important driver of the company’s top-line growth and has been exhibiting improvement over the last few years. The metric is likely to keep growing, riding on improved invested assets and higher interest rates on new investments.

The company has maintained a strong liquidity position with sufficient cash-generation capabilities. Its operations comprise writing basic protection life and supplemental health insurance policies, which generate strong and stable cash flows. For 2025, Globe Life has targeted a consolidated Company Action Level RBC ratio of 300% to 320%.

A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. The insurer has continuously been increasing its dividend over the past eight years (2017-2024), witnessing a CAGR of 7%.

Wrapping Up

Globe Life’s higher life and health sales, improved invested assets, increased productivity and agent count, strong liquidity position and effective capital deployment make it an attractive stock. 

Higher return on capital, impressive dividend history, and solid growth projections should continue to benefit the insurer over the long term. The stock currently carries a Zacks Rank #3 (Hold). 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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