Globe Life Lags Industry, Trades at a Discount: Time to Buy or Hold?

1-Month Performance: GL, AFL, AMSF, UNM & Industry

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GL has outperformed its peers,  Unum Group UNM, whose shares have risen 19.2%, while AMERISAFE, Inc.  AMSF and Aflac Incorporated AFL shares have lost 19.8% and 2.1%, respectively, in the past month.

GL’s Discounted Valuation

Globe Life shares are trading at a discount compared to the industry. Its forward price-to-earnings multiple of 11.16X is lower than the industry average of 13.82X. Also, it has a Value Score of B.

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GL’s Growth Projection Encourages

The Zacks Consensus Estimate for Globe Life’s 2026 earnings per share (EPS) indicates a year-over-year increase of 8.2%. The consensus estimate for revenues is pegged at $6.40 billion, implying a year-over-year improvement of 6.3%.

The consensus estimate for 2027 EPS and revenues indicates an increase of 5.1% and 6.1%, respectively, from the corresponding 2026 estimates.

The company’s earnings have improved 16.1% in the past five years, better than the industry average of 0.6%.

Mixed Analyst Sentiment on GL

The company has witnessed six upward earnings estimate revisions for 2026 over the past 30 days, against no movement in the opposite direction. For 2027, it has witnessed one upward revision and three downward movement. Thus, the Zacks Consensus Estimate for 2026 earnings moved 0.4% north while 2027 earnings have moved 0.6% south over the last 30 days.

GL’s Efficient Use of Shareholder Capital

The return on equity in the trailing 12 months was 20.5%, better than the industry average of 13.3%, reflecting the company’s efficiency in utilizing shareholders’ funds.

Key Points to Note for Globe Life

Globe Life continues to deliver strong earnings growth, supported by disciplined underwriting, healthy premium growth and prudent capital management. In the second quarter of 2026, total premium revenue increased 7% year over year, with life and health premiums rising 3% and 16%, respectively. Management expects health premium growth of 14%-16% in 2026, supported by Medicare Supplement rate increases and strong sales at United American and Family Heritage. Additionally, American Income Life is expected to deliver mid-single-digit growth in agent count and life sales in the second half of 2026.

Moreover, net investment income continues to be another important driver of the company’s top-line growth and has been improving over the last few years, benefiting from higher portfolio yields, higher excess investment income and disciplined investment management. In the second quarter of 2026, net investment income increased 4% year over year to $293.8 million, while excess investment income rose 10% to $38.3 million. The company expects investment income and required interest to each grow around 4%, producing approximately 7% growth in excess investment income.

AI is emerging as an important long-term growth driver for Globe Life. The company expects AI to improve underwriting, claims processing, customer service, agent productivity, lower administrative expenses and drive long-term margin expansion, strengthening Globe Life's competitive position.

Globe Life expects $110-$130 million of remeasurement gains from its third quarter life and health assumption updates, including $90-$100 million from life and $20-$30 million from health, providing a potential boost to 2026 earnings.

A strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. The company returned approximately $200 million to shareholders during the second quarter of 2026. For the remainder of 2026, Globe Life expects to return approximately $350 million to $370 million through dividends and repurchases. The insurer has continuously increased its dividend over the past five years, witnessing a CAGR of 8.9%.

Risks for GL

Globe Life’s target market may be affected by changes in household finances and consumer confidence. Inflation, tariffs and geopolitical events could reduce insurance sales, slowing premium growth.

Globe Life faces regulatory and legal risks that could hurt profits. Higher health claims also remain a concern, with the health obligation ratio rising to 56.8% from 53.3% in the second quarter 2026. Management expects claims to moderate, but health margins remain uncertain, with 2026 guidance of 23-27%.

Conclusion

Globe Life’s higher premium growth, improved investment income, AI initiatives and effective capital deployment position the company well for long-term growth. However, regulatory, legal and health claim risks remain.

Coupled with the impressive dividend history, cheaper valuation, solid growth projections, and higher returns, it is wise to retain this Zacks Rank #3 (Hold) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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