Is Globe Life Stock Outperforming the Dow?

Globe Life Inc. (GL), headquartered in McKinney, Texas, provides various life and supplemental health insurance products, and annuities to lower middle- and middle-income families in the U.S. Valued at $13.4 billion by market cap, the company offers term, whole, and children's life insurance, as well as accidental benefits, mortgage protection, and medicare supplement plans. 

Companies worth $10 billion or more are generally described as “large-cap stocks,” and GL perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the life insurance industry. GL has built a strong reputation for reliability and trustworthiness. With a diverse range of insurance products tailored to different customer requirements and budgets, GL is able to provide competitive pricing while keeping operational costs in check. The company's stable financial standing, fueled by steady revenue streams and sound investment practices, further bolsters its credibility in the industry.

Despite its notable strength, GL shares touched their 52-week high of $176.17 in the last trading session. Over the past three months, GL stock has gained 27.8%, outperforming the Dow Jones Industrials Average’s ($DOWI) 11.8% gains during the same time frame. 

Shares of GL rose 25.5% on a YTD basis and climbed 43.8% over the past 52 weeks, outperforming DOWI’s YTD gains of 7.5% and 21.3% returns over the last year.

To confirm the bullish trend, GL has been trading above its 200-day moving average over the past year, with slight fluctuations. The stock is trading above its 50-day moving average since early April, with a minor fluctuation.

GL outperformed on health premium growth and double-digit NOI per share growth in seven of the last eight quarters, with CEO Frank Svoboda citing resilience despite pressure on working-class customers. Its growth came from Medicare supplement rate hikes and strong sales at United American and Family Heritage, plus higher agent productivity at American Income. The direct-to-consumer channel is improving margins via better leads, and AI is expanding across underwriting, distribution, and admin. Moreover, management expects life and health premiums to keep growing, and accelerated Q1 buybacks will remain a priority for excess cash after dividends.

On Apr. 22, GL shares closed up marginally after reporting its Q1 results. Its adjusted EPS of $3.43 did not meet Wall Street expectations of $3.46. The company’s revenue was $1.56 billion, missing Wall Street forecasts of $1.57 billion. GL expects full-year adjusted EPS in the range of $15.40 to $15.90.

In the competitive arena of life insurance, CNO Financial Group, Inc. (CNO) has lagged behind GL, with a 24.3% uptick on a YTD basis and 38.2% gains over the past 52 weeks. 

Wall Street analysts are moderately bullish on GL’s prospects. The stock has a consensus “Moderate Buy” rating from the 15 analysts covering it, and the mean price target of $175.77 suggests a marginal potential upside from current price levels.