3/8/25
Equitable Holdings, Inc. (NYSE: EQH) is a well-established financial services company specializing in insurance, asset management, and retirement planning. With roots going back over 160 years, it has built a strong presence in the annuity and wealth management sectors, serving both institutional and individual investors.
For those who focus on dividend investing, EQH presents an interesting opportunity. While it doesn’t offer the highest yield in the market, it delivers steady payouts backed by strong cash flow and a conservative payout ratio. This means investors can count on the dividend while also benefiting from potential stock appreciation.
Its financial performance has been impressive, and the stock has gained significant momentum. With a history of returning capital to shareholders through dividends and buybacks, it’s a stock worth considering for those who want a blend of income and growth.
Key Dividend Metrics
💰 Dividend Yield: 1.93%
📈 5-Year Average Yield: 2.55%
💵 Annual Dividend Per Share: $0.96
🎯 Payout Ratio: 24.87%
📆 Next Dividend Payment Date: March 12, 2025
❌ Ex-Dividend Date: March 5, 2025
Dividend Overview
Equitable Holdings provides a reliable dividend, but it’s not necessarily a high-yielding stock. The current dividend yield sits at 1.93%, slightly below its five-year average of 2.55%, which suggests that the stock price has climbed faster than dividend increases.
With an annual payout of $0.96 per share and a low payout ratio of just under 25%, there’s plenty of room for future dividend growth. The company is financially strong, and its approach to capital allocation balances dividends with stock buybacks.
While some income-focused investors may prefer higher-yielding options, EQH makes up for it with its strong price appreciation. The stock has surged nearly 50% in the past year, well ahead of the broader market.
Dividend Growth and Safety
Equitable Holdings has been consistent with its dividend, but its growth rate hasn’t been particularly aggressive. That said, the company has ample financial strength to support future increases if management decides to shift more focus toward income investors.
The safety of the dividend looks solid. The payout ratio is low, meaning the company retains a significant portion of earnings for reinvestment. Additionally, EQH’s levered free cash flow stands at $7.58 billion, providing further assurance that the dividend isn’t at risk.
One area to keep an eye on is the company’s debt load. The debt-to-equity ratio is quite high at 190%, which means EQH is heavily leveraged. However, with over $8 billion in cash reserves, the company has more than enough liquidity to manage its obligations while still rewarding shareholders.
Chart Analysis
Price Action and Trend
The chart for Equitable Holdings (EQH) shows a steady uptrend over the past year, with higher highs and higher lows. The price has remained above the 200-day moving average for a prolonged period, reinforcing the strength of the overall trend. More recently, the stock pulled back from its highs around the $55 level and is now testing support near the 50-day moving average.
The recent dip could indicate a short-term consolidation phase within the broader uptrend. If the stock holds above the 50-day moving average, it could serve as a launching pad for another move higher. However, if it breaks below this level, there could be a deeper retracement toward the 200-day moving average.
Moving Averages
The 50-day moving average has been acting as dynamic support for most of the uptrend. The recent price action shows EQH testing this level, and how the stock reacts in the coming days will be crucial in determining the next leg of the trend.
The 200-day moving average continues to trend higher, showing the stock’s longer-term strength. The gap between the two moving averages remains wide, a sign of strong momentum over the past several months.
Volume and Market Participation
Volume appears to be relatively stable, with periodic spikes during key price movements. The recent pullback has not been accompanied by an alarming increase in volume, which suggests that selling pressure has been moderate rather than aggressive.
During the earlier rally toward $55, there were a few higher-volume days, indicating strong buying interest. This could suggest that if the stock finds support, buyers may step in again to push prices higher.
Relative Strength Index (RSI)
The RSI is currently around 48, indicating a neutral position. It’s neither in overbought nor oversold territory, which means there is room for the stock to move in either direction.
Earlier in the uptrend, the RSI spent a prolonged period in overbought conditions, which signaled strong bullish momentum. Now, the RSI is cooling off, aligning with the recent price consolidation. If it drops further into oversold territory, it could create a buying opportunity.
Recent Candle Action
The last five candles suggest a mix of buying and selling pressure. The recent dip has been met with some resistance, as seen by the wicks on the downside. This suggests that buyers are stepping in at lower levels, but there isn’t enough conviction yet for a strong reversal.
The most recent candle closed slightly above the 50-day moving average, which is a key level to watch. If buyers push the price higher from here, it could confirm support. However, if the price fails to hold, it may signal further downside toward the next support area.
Analyst Ratings
📈 Upgrades
🔹 BMO Capital – On January 23, 2025, BMO Capital initiated coverage on EQH with an “Outperform” rating and set a price target of $70. The upgrade was based on the company’s strong capital position and its strategic initiatives aimed at enhancing shareholder value. Analysts pointed to EQH’s disciplined financial management and its focus on expanding its wealth management division as key drivers for future growth.
🔹 Deutsche Bank – On January 10, 2025, Deutsche Bank upgraded EQH from “Hold” to “Buy”, raising the price target from $47 to $58. The upgrade reflects confidence in EQH’s operational performance and growth prospects in the financial services sector. Deutsche Bank noted that recent earnings results exceeded expectations and that EQH is well-positioned to benefit from rising interest rates.
🔹 Keefe, Bruyette & Woods – On December 9, 2024, this firm upgraded EQH to “Outperform” from “Market Perform”, increasing its price target to $58 from $54. The analysts cited the company’s strong earnings growth, improving return on equity, and effective capital deployment strategy as primary reasons for the positive outlook.
📉 Downgrades
🔻 UBS – On June 18, 2024, UBS downgraded EQH to “Neutral” and set a price target of $43. The downgrade was attributed to concerns about potential market volatility and its impact on EQH’s investment portfolio. UBS analysts noted that while EQH remains fundamentally strong, broader economic uncertainties could limit upside in the near term.
🔻 Wells Fargo – On May 10, 2024, Wells Fargo adjusted its price target for EQH from $46 to $44, while maintaining an “Overweight” rating. The adjustment reflected a more cautious outlook on EQH’s near-term earnings potential, given the possibility of regulatory changes affecting financial institutions.
🔻 Keefe, Bruyette & Woods – On May 7, 2024, the firm lowered its price target on EQH from $43 to $41, maintaining a “Market Perform” rating. Analysts expressed concerns about the company’s exposure to fluctuations in interest rates and potential headwinds in the financial sector that could slow growth momentum.
🎯 Consensus Price Target
Currently, EQH has received 20 “Buy” ratings and 1 “Hold” rating, with an average analyst price target of $63.11 over the past three months. Analysts generally remain positive on the stock, with many citing its strong cash flow generation and ability to navigate changing market conditions. However, some remain cautious due to external economic factors that could impact earnings stability.
Earnings Report Summary
Equitable Holdings, Inc. (EQH) recently released its financial results for the fourth quarter and full year ending December 31, 2024, showing strong performance across its core business segments.
Fourth Quarter 2024 Highlights
- Revenue: The company reported total revenue of $3.62 billion for Q4 2024, a significant increase from $2.17 billion in the same period the previous year.
- Net Income: Net income for the quarter stood at $899 million, a sharp turnaround from a net loss of $698 million in Q4 2023.
- Earnings Per Share (EPS): Basic earnings per share from continuing operations came in at $2.80, compared to a loss per share of $2.15 in the prior year’s fourth quarter.
Full Year 2024 Highlights
- Revenue: For the full year, Equitable Holdings reported total revenue of $12.44 billion, up from $10.53 billion in 2023.
- Net Income: The company’s net income for 2024 was $1.31 billion, slightly higher than the $1.30 billion reported in the previous year.
- Earnings Per Share (EPS): Basic earnings per share from continuing operations for the year were $3.82, an increase from $3.49 in 2023.
Segment Performance
- Retirement: The retirement segment experienced growth, driven by increased demand for annuity products and effective distribution strategies.
- Asset Management: AllianceBernstein, EQH’s asset management arm, delivered positive results, benefiting from favorable market conditions and strong net inflows.
- Wealth Management: The wealth management division continued its steady expansion, reflecting the company’s ongoing commitment to providing comprehensive financial planning services.
Capital Management
Equitable Holdings generated $1.5 billion in cash during 2024 and expects this figure to grow to between $1.6 billion and $1.7 billion in 2025, reflecting an increase of 7% to 13%. This strong cash flow supports the company’s disciplined approach to capital allocation and its focus on shareholder returns.
Outlook
Looking ahead, Equitable Holdings remains optimistic about its growth trajectory. Management plans to leverage its diversified business model to navigate shifting market conditions while continuing to serve clients’ financial needs.
The 2024 financial results highlight the company’s resilience and ability to execute its strategic objectives in an evolving financial landscape.
Financial Health and Stability
Equitable Holdings operates with a strong financial foundation, supported by solid profitability:
- Operating margin: 38.12%
- Net profit margin: 10.24%
- Return on equity (ROE): 41.78%
The company’s revenue growth has been impressive, with a 106% year-over-year increase in the most recent quarter. This kind of growth signals strength and resilience, especially in a financial services firm.
One potential concern is the relatively low return on assets (ROA) of 0.58%. This is common in asset-heavy financial institutions, but it does suggest that the company’s extensive balance sheet isn’t generating outsize returns.
The high debt-to-equity ratio is another factor to watch. While the company generates strong cash flow and has a comfortable cash position, leverage always introduces some level of risk. That said, EQH’s ability to generate billions in free cash flow suggests it can comfortably handle its debt load.
Valuation and Stock Performance
Equitable Holdings trades at a valuation that appears attractive for investors looking for value in the financial sector.
- Price-to-earnings (P/E) ratio: 13.19 (trailing), 6.73 (forward)
- Price-to-sales (P/S) ratio: 1.30
- Price-to-book (P/B) ratio: 196.77 (high due to negative equity impact)
The stock’s forward P/E ratio of 6.73 is well below the average for financial companies, making it look undervalued based on future earnings potential. Compared to sector peers, which typically trade at 10-15 times earnings, EQH stands out as a bargain.
The stock has seen a strong run over the past year, climbing nearly 50% and currently sitting at $50.33. It trades above its 200-day moving average of $45.09, indicating a bullish trend, though it has dipped slightly below its 50-day moving average of $51.78.
Its 52-week high of $56 suggests some resistance at those levels, while its low of $33.38 reflects how far it has climbed. Investors looking at entry points may want to watch for potential pullbacks before adding to positions.
Risks and Considerations
- Market Sensitivity – As a financial services company, EQH’s earnings are closely tied to interest rates and market conditions. A downturn in equities or a prolonged period of low interest rates could impact revenue and profitability.
- High Leverage – The company carries significant debt, with a debt-to-equity ratio over 190%. While its strong cash flow helps offset some concerns, high leverage always adds an element of risk.
- Dividend Growth Uncertainty – EQH has plenty of room to increase its dividend, but its track record doesn’t suggest aggressive growth. Investors focused on rising income may want to consider this before committing.
- Stock Buybacks vs. Dividends – The company prioritizes share repurchases as a means of returning capital to shareholders. While this can boost share price appreciation, it may not be as appealing to income-focused investors who prefer direct cash payouts.
- Regulatory Risks – As an insurance and investment firm, EQH is subject to complex regulations. Any major changes in financial regulations could impact its profitability and capital allocation strategies.
Final Thoughts
Equitable Holdings offers a mix of dividend income and capital appreciation potential. While its 1.93% yield isn’t particularly high, the low payout ratio and strong cash flow suggest that the dividend is safe and could grow in the future.
The stock also looks undervalued based on earnings, making it appealing for those looking for a financial sector play at a reasonable price. The strong rally over the past year shows that investors have taken notice, but with a forward P/E of just 6.73, it may still have room to run.
For those who prefer a combination of income and growth, EQH is worth keeping an eye on. If management chooses to emphasize dividend increases in the coming years, it could become an even more attractive pick for long-term investors.
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