Introduction#
Equitable Holdings, Inc. (EQH has demonstrated a notable financial and strategic trajectory as of mid-2025, marked by a solid stock performance and evolving corporate fundamentals. Trading at $55.12 with a market capitalization of approximately $16.75 billion, the company is navigating growth and capital allocation decisions that reflect both stability and strategic intent in a competitive diversified financial services sector.
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Financial Performance and Growth Dynamics#
The latest fiscal year ending December 31, 2024, revealed a significant revenue increase to $12.44 billion, up from $10.53 billion in 2023, reflecting an 18.13% year-over-year growth. This surge contrasts with a more muted net income growth of +0.38%, underscoring operational and market complexities impacting bottom-line expansion. The company’s earnings per share (EPS) growth of +8.62% further highlights improving profitability metrics, supported by a robust return on equity (ROE) of 56.77% and return on invested capital (ROIC) of 13.34%.
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The operating income margin reached 18.79% in 2024, a substantial improvement over the 7.01% reported in 2023, signaling enhanced operational efficiency. Gross profit margins also rebounded sharply to 80.37% from 27.2% the previous year, indicating improved cost management and revenue quality. These figures suggest that despite net income growth being nearly flat, Equitable Holdings is strengthening its core business profitability and operational leverage.
Capital Structure and Liquidity#
Equitable Holdings maintains a strong liquidity position with $6.96 billion in cash and cash equivalents and a net debt position of approximately -$1.01 billion, indicating more cash than debt on the balance sheet. The company’s total debt stands at $5.95 billion, with a conservative long-term debt load of $3.83 billion relative to its equity base of $1.58 billion.
The balance sheet reflects a large asset base of nearly $296 billion, characteristic of financial services firms with significant investment portfolios and insurance liabilities. The company's debt-to-equity ratio of 2.68x aligns with sector norms, suggesting moderate leverage employed to fuel growth and strategic initiatives.
Cash Flow and Capital Allocation#
Free cash flow surged by over 670% year-over-year, reaching $1.85 billion in 2024, a dramatic turnaround from negative free cash flow in prior years. This improvement is supported by net cash provided by operating activities of $2.01 billion. Capital expenditures remain modest at $153 million, aligning with the company's asset-light model.
Notably, Equitable Holdings increased its financing activities cash inflows to $12.44 billion, which includes share repurchases of approximately $1.01 billion and dividends paid totaling $382 million. The dividend payout ratio remains conservative at 30.49%, with a dividend yield of 1.8%, maintaining an attractive income proposition for shareholders without overextending cash resources.
Strategic Developments and Market Position#
Under CEO Mark Pearson's leadership, Equitable Holdings is focusing on optimizing its diversified financial services portfolio, balancing insurance, asset management, and retirement solutions. The company’s strategy appears calibrated to leverage rising revenue streams while improving operational margins, as evidenced by recent financial results.
Analyst estimates project a steady revenue compound annual growth rate (CAGR) of 6.4% through 2028, with EPS expected to grow at an accelerated 15.8% CAGR during the same period. These projections are consistent with the company’s recent operational improvements and strategic capital allocation.
Competitive Landscape#
Equitable Holdings operates within a highly competitive diversified financial sector where scale, capital efficiency, and product innovation are critical. The company's improving margins and cash flow generation position it favorably against peers, especially in managing insurance risk and asset-liability matching. The low net debt and strong equity returns provide financial flexibility to pursue selective acquisitions or technology investments to enhance customer offerings.
What Drives Equitable Holdings' Dividend Sustainability?#
Equitable Holdings maintains a disciplined dividend policy supported by consistent free cash flow growth and a payout ratio comfortably below 35%. The dividend per share remained steady at $0.99 annually, with quarterly payouts recently adjusted to reflect earnings stability. This conservative approach suggests the dividend is well-supported and sustainable amidst ongoing capital reinvestment.
Supporting Financial Metrics#
| Metric | Value |
|---|---|
| Dividend Yield | 1.8% |
| Payout Ratio | 30.49% |
| Free Cash Flow (2024) | $1.85B |
| Net Income (2024) | $1.31B |
Valuation and Forward Outlook#
Currently trading at a price-to-earnings (P/E) ratio of 14.86x, Equitable Holdings is positioned attractively given its robust financial profile and growth outlook. Forward P/E estimates suggest a descending trend to 8.08x in 2025 and further to 4.77x by 2028, indicating market expectations of improving earnings power and profitability.
Enterprise value to EBITDA (EV/EBITDA) stands at 5.21x, underscoring reasonable valuation metrics relative to earnings before interest, taxes, depreciation, and amortization.
| Year | Estimated Revenue | Estimated EPS | Forward P/E | Forward EV/EBITDA |
|---|---|---|---|---|
| 2024 | $14.91B | $6.01 | 13.98x | 4.78x |
| 2025 | $14.92B | $6.38 | 8.08x | 4.78x |
| 2026 | $14.95B | $8.12 | 6.32x | 4.77x |
| 2027 | $17.11B | $9.63 | 5.54x | 4.17x |
| 2028 | $19.11B | $10.80 | 4.77x | 3.73x |
Key Takeaways#
- Strong revenue growth of +18.13% in 2024 indicates effective market positioning and demand across Equitable’s diversified financial services.
- Operating margin improvement to 18.79% and gross profit margin rebound to 80.37% reflect enhanced cost management and operational efficiency.
- Cash flow strength with a 670% increase in free cash flow enables disciplined capital allocation, including dividends and share repurchases.
- Conservative dividend payout ratio of 30.49% with a sustainable yield of 1.8% supports income investor appeal.
- Forward earnings growth and declining valuation multiples suggest increasing market confidence in the company’s earnings power.
What This Means For Investors#
Equitable Holdings is demonstrating a strategic balance between growth and financial discipline, strengthening its competitive stance within the diversified financial sector. The company’s improving margins and cash flows provide a solid foundation for sustainable shareholder returns and potential strategic flexibility. Investors should monitor upcoming earnings announcements scheduled for July 28, 2025, for further clarity on execution momentum.
Equitable’s management appears committed to leveraging its asset base and operational improvements to drive long-term value, with a clear focus on balancing shareholder returns and reinvestment. This positions the company well amid evolving market conditions and competitive pressures in the financial services landscape.