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Why Should You Hold Torchmark (TMK) in Your Portfolio?
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Torchmark Corporation , a life insurer, has catered to the specific needs of clients through a niche market focus, sustained operational performance and disciplined capital management. The company offers various life and health insurance products, plus annuities in the United States, Canada and New Zealand.
Torchmark’s most important distribution channel, American Income Exclusive Agency, has been witnessing improved life premiums over last several quarters. In addition, the agency’s net sales are rising, mainly driven by an increased agent count. The company projects life sales growth in the range of 7–11% for 2017.
The life insurer displayed a stable operational performance at Global Life, pertaining to increased life premiums and better underwriting margins, over the years. Significantly, the company projects life sales to decline 4–9% in 2017 as it expects to continue to have lower circulation to improve profitability at certain segments.
Additionally, the company’s sturdy capital position and robust capital management would propel it to engage in shareholder-friendly moves such as regular dividend payments and share buybacks.
Torchmark anticipates the sale of Medicare Part D business to generate around $55–$60 million capital in 2017.
However, higher administrative expenses, pension costs and further investments in IT systems will likely bother its earnings in the near term.
The company’s shares gained 3.67% year to date, underperforming the Zacks categorized Life Insurance industry’s rally of 13.24%. However, we expect strong operational performance, solid segmental performance and robust capital management should result in share price appreciation.
Valuation is also attractive at present as the stock is currently trading at a price to book multiple of 1.90, an 11.2% discount to the industry average of 2.14. Also, Torchmark has a trailing 12-month return on equity (ROE) of 11.6%, which is higher than the industry average of 9.0%.
The company also carries a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics.
Investors interested in other stocks from the insurance industry might consider Cigna Corporation (CI - Free Report) , Old Republic International Corporation (ORI - Free Report) and Fidelity National Financial, Inc. (FNF - Free Report) . Each holds a Zacks Rank #2.
Cigna Corporation provides insurance plus related products and services in the United States and internationally. The company delivered positive surprises in three of the last four quarters with average beat of 1.35%.
Old Republic International Corporation engages in insurance underwriting and related services business primarily in the United States and Canada. The company delivered positive surprises in two of last four quarters with average beat of 11.37%.
Fidelity National provides title insurance and technology and transaction services to real estate and mortgage industries in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 8.47%.
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Why Should You Hold Torchmark (TMK) in Your Portfolio?
Torchmark Corporation , a life insurer, has catered to the specific needs of clients through a niche market focus, sustained operational performance and disciplined capital management. The company offers various life and health insurance products, plus annuities in the United States, Canada and New Zealand.
Torchmark’s most important distribution channel, American Income Exclusive Agency, has been witnessing improved life premiums over last several quarters. In addition, the agency’s net sales are rising, mainly driven by an increased agent count. The company projects life sales growth in the range of 7–11% for 2017.
The life insurer displayed a stable operational performance at Global Life, pertaining to increased life premiums and better underwriting margins, over the years. Significantly, the company projects life sales to decline 4–9% in 2017 as it expects to continue to have lower circulation to improve profitability at certain segments.
Additionally, the company’s sturdy capital position and robust capital management would propel it to engage in shareholder-friendly moves such as regular dividend payments and share buybacks.
Torchmark anticipates the sale of Medicare Part D business to generate around $55–$60 million capital in 2017.
However, higher administrative expenses, pension costs and further investments in IT systems will likely bother its earnings in the near term.
The company’s shares gained 3.67% year to date, underperforming the Zacks categorized Life Insurance industry’s rally of 13.24%. However, we expect strong operational performance, solid segmental performance and robust capital management should result in share price appreciation.
Valuation is also attractive at present as the stock is currently trading at a price to book multiple of 1.90, an 11.2% discount to the industry average of 2.14. Also, Torchmark has a trailing 12-month return on equity (ROE) of 11.6%, which is higher than the industry average of 9.0%.
The company also carries a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics.
Zacks Rank
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Investors interested in other stocks from the insurance industry might consider Cigna Corporation (CI - Free Report) , Old Republic International Corporation (ORI - Free Report) and Fidelity National Financial, Inc. (FNF - Free Report) . Each holds a Zacks Rank #2.
Cigna Corporation provides insurance plus related products and services in the United States and internationally. The company delivered positive surprises in three of the last four quarters with average beat of 1.35%.
Old Republic International Corporation engages in insurance underwriting and related services business primarily in the United States and Canada. The company delivered positive surprises in two of last four quarters with average beat of 11.37%.
Fidelity National provides title insurance and technology and transaction services to real estate and mortgage industries in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 8.47%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>