MetLife Fights Through Headwinds

Life insurance isn't sexy, but profits and high returns on capital are (at least to value investors). In the first quarter, MetLife (NYSE: MET  ) increased total sales 12% to $12.9 billion. Operating earnings per share were up 6% to $1.44, which generated a 14.1% return on equity.

MetLife's main business is writing life and health insurance, where it competes with other industry giants such as Prudential (NYSE: PRU  ) , Torchmark (NYSE: TMK  ) , and Allianz (NYSE: AZ  ) . Lately, life insurers have been facing headwinds from a difficult interest rate environment and tough competition on pricing. However, MetLife's institutional business fought through and was able to post a solid 9% increase in after-tax operating earnings compared to last year's first quarter, thanks to favorable claims development and the ability to maintain healthy spreads on its investments.

The individual business had a tougher time, with a 22% drop in operating earnings. The annuity business also saw a decline in deposits versus a year ago. MetLife believes that it should be able to get back to speed in both of these segments thanks to momentum in the agency distribution channel.

The international segment was the quarter's star performer, with 18% revenue growth and a blazing 63% operating earnings growth, which included some one-time items. The company had a lot of success with new sales in Mexico and Japan.

MetLife also showed a penchant for its own stock. In the past quarter, the company completed a $750 million share buyback. However, going forward, management decided not to commit to any capital deployment plans, but instead to go where the opportunities are, whether that be expansion, acquisition, or further buybacks.

MetLife is a steady performer operating in the relatively predictable life insurance industry. With a stock price at 1.5 times book value, and roughly 11.5 times estimated forward earnings, the stock could be interesting for investors for a solid place to put some money to work.

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Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.