With interest rates set to rise sharply and consistently for the next year or more, many growth stocks will probably continue to struggle in the near term. But there are some segments of the market where rising interest rates are a good thing -- including some within the financial sector.

Here are two financial stocks that may not be on your radar that should get a boost from interest rate hikes -- Voya Financial (VOYA -0.04%) and Jackson Financial (JXN 3.22%). And they both have one thing in common -- a focus on annuities.

Person working on a laptop at the kitchen table.

Image source: Getty Images.

Two of the leading providers of annuities

Annuities are a long-term investment, typically provided by insurers, where investors' premiums are converted into a fixed income stream, typically paid out monthly over a set period. You may have an annuity yourself, as they are popular retirement investments.

These two companies are two of the leading providers of annuities in the U.S. Jackson Financial is the second-largest provider of annuities, with about a 6.2% market share, while Voya has a 3.9% market share. Voya is the 10th largest overall, but it is the second-largest provider for annuities in group retirement plans.

This matters right now because annuities are more attractive to investors when interest rates go up. Higher rates typically translate to higher yields on the annuities. At a time when the stock market is in negative territory, investors also flock to the safety of annuities, which are safer than even bonds because they do not go down in price when rates rise.

These are obviously both good things for companies that specialize in annuities.

Flight to safety

The market volatility that we've seen over the past six months or so has already resulted in investors making a significant shift to annuities. Overall, in 2021, annuity sales were at their highest level since 2008.

Jackson Financial saw operating earnings from its retail annuities rise 25% in the fourth quarter to $750 million, while annuity sales hit $5 billion in the quarter, the highest total of the year. On the fourth-quarter earnings call, Jackson CEO Laura Prieskorn said she expects retail annuities to drive further profitability in 2022 for a variety of reasons, including market conditions.

Jackson Financial, based in Michigan, spun off from London-based Prudential Plc (not to be confused with Prudential Financial) last fall. The stock is up about 6% year to date. It is also ridiculously undervalued, with a price-to-earnings (P/E) ratio of around 1 and a price-to-book ratio of just 0.37.

Voya Financial is one of the largest retirement plan sponsors and administrators, but as mentioned, it is also one of the largest providers of annuities in retirement plans. The company saw net income rise 57% in the fourth quarter to $403 million and had a record $1.1 billion in after-tax operating earnings in all of 2021. It projects a $20 million to $30 million boost in revenue in 2022 if interest rates rise 100 basis points.

Voya's stock price is about even year-to-date, trading at around $66 per share. The consensus price target, according to analysts, is about $79 per share, a rise of roughly 18% over the next 12 months. Like Jackson, it is trading below book value, with a price-to-book ratio of 0.87, and it has a P/E ratio of about 4.

If you're looking for a relatively safe place to allocate some of your investment dollars in this uncertain market, these two stocks are not bad options to check out.