An Incremental Negative

Another incremental negative is that the Federal Reserve is not allowing Met Life to return cash to shareholders until the stress tests next year. Met Life is in relatively good shape and if the Fed is not letting them return capital to shareholders its likely that nobody will be allowed. This is especially bad for the financials.


Brent Barber said...

The Fed is not letting them raise
their dividend based on the fact they are a bank holding company as they
own a small bank. Really dumb as the state insurance superintendents
did a vastly better job than the Fed in managing the insurance companies
the last cycle. If they approve the dividend, Fed should get out of
the way. MET is talking about just selling this group and then raising
dividend. Plus Fitch just confirmed their A (Strong) rating.

Probably a buying opportunity, plus the life insurance companies, including MET, are some fo the cheapest in the market based on traditional valuations.

Tsachy Mishal said...

Its definitely a positive that MET wants to return cash to shareholders. But it cant right now. The valuation does seem very cheap. I see it as a larger negative for the financials as a group. If MET is not allowed, nobody will be allowed.