Smart Dividend Portfolio Edition #65: Policy Powerhouse
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Dear Investor,
Welcome to the 65th edition of TipRanks’ Smart Dividend Portfolio & Newsletter.
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Market-Moving News: Jun 16, 2025
Stocks clocked in weekly losses as Middle East hostilities flared up. The Dow Jones Industrial Average (DJIA) lost 1.32% for the week, returning to negative territory year-to-date. Meanwhile, the S&P 500 finished down 0.39%, and the tech-heavy Nasdaq-100 (NDX) lost 0.60% for the week.
The week unfolded positively through Thursday, with stocks lifted by better-than-expected economic data and a strong showing in tech shares. June’s University of Michigan consumer sentiment survey showed that households are feeling much less pessimistic about the inflation outlook, with the consumer sentiment index strongly rebounding in its first improvement in six months. Cooler-than-expected consumer and producer inflation reports lifted Fed cut expectations and investor spirits, as the data reflected no visible impact from tariffs on prices.
On the trade front, there were no major headlines, with gradual progress seen in U.S.-China trade discussions, and deals with India, Mexico, and Canada progressing in parallel. The “no scoop” atmosphere around tariff issues supported investor calm.
However, after stocks inched up near their record highs, a re-intensification of geopolitical risk, just as U.S.-China trade tensions subsided, pulled markets lower. Global stocks fell and oil prices surged on Friday, as Iran sent missiles into Israeli cities after Israeli airstrikes hit Iran’s nuclear and military facilities. Gold and the U.S. dollar rose as investors searched for safe havens.
The flare up in Middle East tensions is a wild card for the Federal Reserve, which is having its rate policy meeting this week. After several months of oil price declines exerting a disinflationary effect on headline price indexes, this backdrop is about to change.
Iran produces about 3.3 million barrels of oil per day, accounting for roughly 3% of global output. A total production shutdown could push global oil prices above $100 per barrel, with worst-case scenarios seeing spikes up to $130, especially if the Strait of Hormuz, a chokepoint for 20% of global oil shipments, is disrupted. Although a strengthening USD can act as a partial counterweight, dampening inflation through lower import costs, the extent of its effects is limited.
The futures markets still foresee no change in Fed rates at the coming meeting, and the chances for a July cut have risen only marginally. However, the central bank’s path to interest rate cuts starting in September appears to have widened.
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This Week’s Quality Dividend Stock Idea
MetLife (MET) is a leading global insurance company that provides life insurance, annuities, employee benefits, and asset management services. With operations spanning the globe, the company serves a wide spectrum of clients – from individuals and families to businesses and large institutions – focused on delivering financial protection and retirement solutions tailored to diverse needs. Backed by a strong brand and decades of industry experience, MetLife maintains a well-diversified portfolio that supports its resilience across economic cycles and geographies. The company continues to evolve its business through strategic partnerships, digital transformation, and product innovation.
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Historic Roots
Founded in 1868 in New York City, MetLife began as the National Union Life and Limb Insurance Company, initially providing coverage to Civil War soldiers. That same year, it rebranded as the Metropolitan Life Insurance Company, shifting its focus to life insurance for the working class. By the early 20th century, MetLife introduced group insurance and built a strong U.S. presence through innovative products and a reputation for reliability.
Over the decades, MetLife evolved into a global financial services provider, expanding across Asia, Latin America, Europe, and the Middle East. The company’s 1999 incorporation in Delaware and its 2000 initial public offering marked a strategic transformation from a mutual to a publicly traded company, unlocking greater access to capital and enabling more aggressive growth.
MetLife’s international footprint grew through acquisitions, notably the $16.2 billion purchase of American Life Insurance Company (Alico) from AIG in 2010, which significantly broadened its presence in Japan, Europe, the Middle East, and Latin America. Other key deals included the 2005 acquisition of Citigroup’s Travelers Life & Annuity business, making MetLife the largest individual life insurer in North America by sales, and the 2001 acquisition of Grand Bank, later rebranded as MetLife Bank. The company exited retail banking in 2013, selling its deposit business to GE Capital Retail Bank.
In recent years, MetLife has sharpened its focus on asset management and specialty insurance. Between 2019 and 2025, it acquired Beazley Furlonge’s U.S. operations, ESG-focused Affirmative Investment Management, alternative asset manager Raven Capital, and PineBridge Investments for $1.2 billion. In 2025, MetLife also agreed to acquire Mesirow’s high-yield and fixed-income teams to strengthen its leveraged finance platform.
At the same time, MetLife has streamlined its operations. It sold its Auto & Home business in 2021 for $3.9 billion and completed a $19 billion pension risk transfer with Global Atlantic in 2023.
In 2024, it partnered with General Atlantic to form Chariot Reinsurance, a Bermuda-based life and annuity reinsurer expected to launch later this year. MetLife plans to transfer a block of structured settlement and pension annuity liabilities to Chariot Re, which will be managed exclusively by MetLife Investment Management and General Atlantic.
Today, with a market capitalization of almost $52 billion and annual revenues of nearly $74 billion, MetLife holds leading positions in over 40 countries, ranking #54 on the Fortune 500 list, supported by its resilient business model and strategic global expansion.
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Financial Powerhouse
MetLife is a global financial services leader offering insurance, annuities, employee benefits, and asset management through six business segments: Group Benefits, Retirement and Income Solutions (RIS), Asia, Latin America, EMEA (Europe, Middle East, and Africa), and MetLife Holdings. The company maintains a diverse portfolio and a multi-channel distribution strategy tailored to each market’s maturity and regulatory environment.
The Group Benefits segment provides a wide range of employer-sponsored insurance products, including life, dental, disability, accidental death and dismemberment (AD&D), vision, prepaid legal, and pet insurance. In Q1 2025, adjusted earnings rose 29% year-over-year to $367 million, driven by significantly lower working-age mortality. The Group Life mortality ratio came in at 84.8%, at the low end of the company’s target range of 84–89%, boosting underwriting margins. While reported premium revenue increased just 2% due to lower claims on participating life policies, underlying premiums, fees, and other revenue (PFO) rose by approximately 4%. Specifically, fewer claims meant less premium was required from policyholders, which reduced reported PFO growth.
Dental and non-medical health claims were seasonally high, but recent price increases are expected to normalize margins in Q2. Persistency rates1 slightly declined as higher dental rates led some costlier clients not to renew. Nonetheless, management reaffirmed full-year PFO growth guidance of 4–7% for this segment, citing low expenses and strong fundamentals.
RIS, which offers pension and annuity solutions to institutional clients, reported adjusted earnings of $401 million, up 1% year-over-year. The segment recorded $1.8 billion in pension risk transfer (PRT) inflows, as corporate clients continued to offload pension obligations to reduce balance sheet risk. RIS also closed a major ~$1.4 billion longevity reinsurance deal in the UK, reflecting growing demand from pension funds looking to hedge longevity risk amid aging populations. Excluding PRT, PFOs rose 14%, supported by strong demand for UK reinsurance and stable-value annuities. While the core spread2 narrowed by 7 basis points sequentially in Q1 due to interest-rate cap expirations and a flatter yield curve, active portfolio repositioning helped offset the impact. A flatter yield curve compresses the difference between investment returns and funding costs.
MetLife expects RIS liabilities to grow at the upper end of its 3–5% annual target in FY25, underpinned by favorable demographics and heightened demand for de-risking solutions.
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1 – Persistency rate is the percentage of insurance policies that remain in force over a given period, reflecting customer retention and renewal behavior.
2 – Core spread is the difference between the investment income earned on assets and the interest credited to policyholders, excluding variable or non-recurring components. It’s a key profitability metric for annuity and pension products.
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Global Reach
Beyond its core U.S. business, MetLife sustains a strong international presence. The company maintains a broad international footprint, operating across nine jurisdictions in Asia, where Japan serves as its largest and most mature market. Asia contributed adjusted earnings of $374 million in Q1, down 12% due to weaker underwriting margins and a tax-related adjustment in Japan. However, sales across Asia grew about 10% year-over-year, driven by product innovation in Japan and strong gains in China and Korea through expanded distribution. Management remains optimistic about growth in the region, despite FX volatility and geopolitical headwinds.
In Latin America, the company’s strongest presence is in Mexico and Chile, supported by a multi-channel distribution strategy tailored to the unique dynamics of each region and the level of market development. Adjusted earnings for this segment totaled$218 million, down 6% on a reported basis but up 7% in constant currency. The decline was attributed to FX headwinds, notably a weaker Mexican peso, and softer reserve yields in Chile. Operationally, the region performed well, with 14% constant-currency PFO growth driven by higher sales and improved persistency across Brazil, Mexico, and Chile. The company expects continued momentum in this region as currency pressures ease and demographic trends remain supportive.
In the EMEA (Europe, Middle East, and Africa) region, MetLife’s core operations are concentrated in the Gulf region, the United Kingdom, and France–markets where regulatory frameworks and customer needs align well with MetLife’s offerings. EMEA posted adjusted earnings of $83 million, up 14% in constant currency, supported by robust sales in the UK and the Middle East. PFOs rose 12% on a constant currency basis, boosted by recent UK reinsurance deals and a favorable regulatory environment. The company projects continued double-digit sales growth in the region.
MetLife Holdings includes legacy U.S. insurance products no longer actively marketed, such as variable, universal, term, and whole life insurance; fixed, variable, and index-linked annuities; and long-term care insurance. It also includes a block of assumed variable annuity3 guarantees from a third party. In a major risk transfer move, MetLife agreed to reinsure approximately $10 billion of these annuity liabilities to Talcott Resolution Life, enhancing capital flexibility and reducing earnings volatility.
MetLife Investment Management (MIM), the company’s institutional asset management arm, plays a critical role in the firm’s capital-light growth strategy. With over $700 billion in AUM, MIM is growing rapidly through strategic acquisitions. Recent deals include the 2024 acquisition of PineBridge Investments, which added $100 billion in AUM and expanded capabilities in collateralized loan obligations (CLOs), multi-asset strategies, and real estate, particularly in Asia. In 2025, MetLife integrated Mesirow’s high-yield and fixed-income teams, bolstering its leveraged finance platform. These moves support the company’s goal of reaching $1 trillion in AUM and strengthen its New Frontier strategy. MetLife’s New Frontier strategy, launched post-2019, focuses on group benefits leadership, leveraging its retirement platforms, growth in its asset management business, and expanding in high-growth international markets.
Despite a volatile macroeconomic backdrop, marked by rising interest rates, market fluctuations, and a softening U.S. dollar, MetLife continues to emphasize stability. Its recurring revenue model, diversified global presence, prudent underwriting, and disciplined capital allocation make it an “all-weather” enterprise.
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3 – A variable annuity is a contract with an insurance company that offers tax-deferred growth and investment in market-based options. Its value and payouts vary with investment performance, unlike fixed annuities.
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Resilient Performance
MetLife has delivered a resilient financial performance, supported by its diversified insurance and asset management operations. Over the past three years, the company’s revenue grew at a modest compound annual growth rate (CAGR) of 1.2%, while earnings declined at a CAGR of 11.8%. This mixed trend reflects strong top-line drivers, such as growth in premiums, fees, and investment assets, offset by pressure on the bottom line due to investment income volatility, net losses from investments and derivatives, higher expenses, and accounting changes.
In Q1 2025, MetLife reported revenues of $18.6 billion, marking a robust 15.6% year-over-year increase. This growth was fueled by strong premium and fee generation, higher variable investment income, favorable underwriting results, volume expansion across global markets, and effective asset management. Revenues exceeded consensus expectations, highlighting the company’s operational strength.
Adjusted net income rose 1% year-over-year to $1.35 billion, while adjusted earnings per share (EPS) increased 7% to $1.96. Despite these solid gains, EPS fell slightly short of Wall Street estimates. MetLife’s adjusted return on equity (ROE) stood at 14.4%, placing it in the top 30% among its industry peers. The company also maintained a low direct expense ratio of 12%, reinforcing its focus on cost discipline.
Adjusted book value per share rose 4% year-over-year to $55.01, and holding company cash stood at $4.5 billion, comfortably above the company’s target buffer of $3-4 billion. These metrics reflect MetLife’s financial prudence and ability to generate predictable free cash flow, primarily supported by long-duration insurance contracts and a growing base of fee-based services.
MetLife’s strong Q1 performance was underpinned by momentum across its Group Benefits and Retirement and Income Solutions (RIS) segments, as well as continued strength in high-growth markets such as Asia and Latin America. The company also benefited from the expansion of MetLife Investment Management (MIM), whose recent acquisitions, including PineBridge Investments in 2024, have significantly boosted its fee-based revenue and broadened its asset management capabilities.
Despite a relatively high debt-to-equity ratio of 0.7 – above the sector median – MetLife’s leverage reflects its large-scale, capital-intensive business model and strategic use of debt to support growth and enhance returns. This is typical among large, diversified insurers and is supported by strong investment-grade credit ratings: “A-” from S&P and Fitch, and “A3” from Moody’s.
Looking ahead, MetLife expects sustained earnings and free cash flow growth through 2026. Its outlook is underpinned by strategic initiatives such as the 2024 Chariot Reinsurance partnership, which improves capital efficiency, and ongoing digital transformation efforts that enhance productivity and customer engagement.
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Shareholder Value
MetLife continues to prioritize shareholder value through disciplined capital deployment, anchored by consistent dividends and opportunistic share repurchases. This approach is supported by the company’s diversified earnings base, solid liquidity, and a strong balance sheet.
MetLife has paid dividends for 26 consecutive years, establishing itself as a reliable income-generating stock. While MetLife paused dividend increases in 2016 and 2017 due to derivative-related losses and market volatility, it has resumed consistent growth since 2018.
MET’s dividends have grown at an annualized rate of about 4-5% over the past decade. The company’s solid finances and robust liquidity, coupled with a modest payout ratio of 26.6%, support analyst expectations for payout increases at a similar rate for years to come. The latest such increase came in June, when MetLife paid a quarterly dividend that was 4.1% higher than in Q1 2025. Accounting for the raise, the company’s dividend yield is now 2.87%, more than double the sector average.
During Q1 2025, MetLife distributed $374 million in dividends, reflecting its commitment to consistent capital return. The company’s solid free cash flow and healthy statutory capital position, supported by its cash and liquid assets at the holding company, ensure flexibility for both payouts and reinvestment.
In addition to dividends, MetLife has been actively repurchasing its own shares. In Q1 2025, the company returned $1.4 billion through share buybacks, bringing total shareholder returns to $1.8 billion for the quarter. In April 2025, the Board of Directors authorized a new $3 billion buyback program, signaling confidence in MetLife’s intrinsic value and long-term earnings power. This new authorization was incremental to the approximately $360 million remaining under the company’s prior authorization announced in May 2024.
These actions underscore management’s strategic focus on enhancing shareholder value while maintaining financial strength. Over the past year, MetLife’s stock price has climbed by over 11%, reflecting investor optimism around the company’s consistent execution, growth momentum in key business lines, and disciplined capital allocation. Wall Street analysts are bullish about MET, projecting a nearly 21% upside in the stock price over the next 12 months due to the company’s improving fundamentals, attractive valuation, reliable capital return policies, operational excellence, and resilience in various market environments.
MET is now trading at non-GAAP P/E ratios of 9.34x (TTM) and 8.44x (forward), carrying a nearly 20% discount to the Financial sector medians. Compared to its peers in the industry, it sits towards the bottom of the valuation scale in terms of P/E ratios, while coming in toward the middle on a price-to-book basis. Discounted cash flow models suggest the stock may be undervalued by as much as 53%, indicating further room for appreciation as fundamentals continue to strengthen.
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Investing Takeaway
MetLife offers investors a compelling blend of income and long-term value creation, anchored by its disciplined approach to capital returns. The company has built a strong track record of consistent dividend payments over the past two decades, with steady increases in most years that reflect both earnings strength and management’s commitment to rewarding shareholders. Supported by solid free cash flow and a strong balance sheet, MetLife maintains a healthy payout ratio, balancing income distribution with reinvestment in growth. In addition to dividends, MetLife has been aggressive with share repurchases, signaling management’s confidence in the stock’s intrinsic value. These actions are supported by a diversified earnings base, strong liquidity, and effective risk management. For investors seeking a reliable capital return profile with room for stock price appreciation, MetLife presents a well-positioned opportunity in today’s market.
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Dividend Investor Portfolio
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Portfolio News
▣ BlackRock (BLK) has rapidly emerged as the second-largest holder of Bitcoin globally. This significant milestone was achieved through its iShares Bitcoin Trust (IBIT), which has accumulated more than 662,500 BTC as of June 10. Valued at approximately $72 billion, this holding represents over 3% of Bitcoin’s total supply. What makes this development even more striking is the speed of accumulation. Launched less than a year ago, IBIT reached this position in just 341 days, earning the distinction of being the fastest-growing exchange-traded fund (ETF) in history.
▣ Kroger (KR) is scheduled to announce its Q1 results on June 20. Wall Street analysts expect the grocery giant to post adjusted earnings per share (EPS) of $1.45 on revenue of $45.2 billion. For the quarter, Kroger anticipates that identical sales without fuel will remain steady, with a gradual build expected through the remainder of the year as volume trends improve. The company also expects its Q1 adjusted EPS to be in line with the prior year’s figure of $1.43. Looking ahead, Kroger projects year-over-year growth in adjusted EPS from the second quarter through the end of the fiscal year, supported by ongoing operational improvements and stronger sales momentum.
▣ VICI Properties’ (VICI) ex-dividend date is set for June 13, and the dividend is scheduled to be paid on July 1.
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Recent Trades
None at the moment, although we are considering adding a stock to our portfolio when the market conditions allow for an attractive entry point. Stay tuned.
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Portfolio Attributes
| Dividend Portfolio Yield |
Expected Dividend Growth | Expected Annual Income |
| 3.99% | +6.56% | $6,009.10 |
| Yield-on-Cost Adjusted, Weighted |
Average Analyst 12-Month Growth Outlook | 10K Per Stock at the Time of Purchase |
Current Portfolio
| Name | EX-Dividend Date | Payment Date | Yield on Cost | Annual DPS |
| Automatic Data Processing (ADP) | Sep 16, 2025 | Oct 02, 2025 | 2.46% | $6.16 |
| Amgen (AMGN) | Aug 18, 2025 | Sep 09, 2025 | 3.27% | $9.52 |
| BlackRock (BLK) | Sep 09, 2025 | Sep 23, 2025 | 2.61% | $20.84 |
| Bank of Nova Scotia (BNS) | Jul 02, 2025 | Jul 29, 2025 | 5.98% | $3.2 |
| EOG Resources (EOG) | Jul 17, 2025 | Jul 31, 2025 | 3.06% | $3.92 |
| ExxonMobil (XOM) | Aug 15, 2025 | Sep 10, 2025 | 3.64% | $3.96 |
| IBM (IBM) | Aug 11, 2025 | Sep 10, 2025 | 3.14% | $6.72 |
| JPMorgan Chase (JPM) | Jul 08, 2025 | Jul 31, 2025 | 3.2% | $5.60 |
| Kroger (KR) | Aug 15, 2025 | Sep 01, 2025 | 2.82% | $1.28 |
| LyondellBasell (LYB) | Aug 26, 2025 | Sep 03, 2025 | 5.74% | $5.48 |
| PepsiCo (PEP) | Sep 09, 2025 | Sep 30, 2025 | 3.64% | $5.44 |
| Philip Morris (PM) | Jun 23, 2025 | Jul 17, 2025 | 6.06% | $5.40 |
| Qualcomm (QCOM) | Sep 05, 2025 | Sep 26, 2025 | 2.36% | $3.56 |
| VICI Properties (VICI) | Sep 18, 2025 | Oct 06, 2025 | 5.22% | $1.73 |
| Verizon (VZ) | Jul 10, 2025 | Aug 05, 2025 | 6.09% | $2.71 |
NameEX-Dividend DatePayment DateYield on Cost Annual DPS
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Click here for more stock market analysis from TipRanks Macro & Markets research analyst Yulia Vaiman
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Disclaimer
The information contained in this article represents the views and opinions of the writer only, and not the views or opinions of TipRanks or its affiliates and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy, or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment, and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices, or performance.
