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Here's Why Should You Hold Primerica (PRI) Stock in Portfolio
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Primerica, Inc.’s (PRI - Free Report) compelling portfolio, strong market presence, solid capital position and favorable growth estimates make it worth retaining in one’s portfolio.
Zacks Rank & Price Performance
Primerica currently carries a Zacks Rank #3 (Hold). In the past six months, the stock has rallied 21.7%, outperforming the industry’s increase of 7.8%.
Image Source: Zacks Investment Research
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 has moved 0.3% north in the past 30 days, reflecting analyst optimism.
Optimistic Growth Projections
The Zacks Consensus Estimate for Primerica’s 2023 earnings is pegged at $13.18, indicating a 20.2% increase from the year-ago estimated figure on 4.9% higher revenues of $2.9 billion.
Growth Drivers
Primerica, the second-largest issuer of term-life insurance coverage in North America, remains focused on emerging as a successful senior health business while continuing to enhance its shareholders’ value.
The insurer is poised to gain from strong demand for protection products that in turn should drive sales growth and policy persistency. PRI’s strong business model makes it well poised to cater to the middle market's increased demand for financial security.
The insurer stays focused on increasing the size of life license sales force through continued recruiting and licensing. Licensed representatives play a major role in driving operational results for PRI. The insurer thus remains focused on growing licensed representatives.
Given mid-single-digit sales growth, PRI expects ADP growth to hover around 6% per year for the next three years.
With the U.S. mortgage distribution business gaining traction, Primerica remains focused on expanding distribution. However, given an improving interest rate environment, PRI expects growth to be muted in this segment.
Life insurers are direct beneficiaries of an improving interest rate environment. The Fed raised interest rates seven times in 2022, with more on the horizon this year. At its December meeting, the Fed indicated taking the interest rate to 5.1% in 2023 to combat its expected 3.1% inflation. Thus, an improving interest rate environment should aid net investment income.
The insurer had solid liquidity with cash and cash equivalents. Primerica has been strengthening its balance sheet by improving its leverage ratio. PRI scores strongly with credit rating agencies.
Primerica has a solid dividend history banking on operational excellence of Term Life and ISP businesses. It has hiked dividends 10 times in the last nine years. The insurer also engages in share buyback. PRI expects the Term Life business to be the primary source of deployable capital
Image: Bigstock
Here's Why Should You Hold Primerica (PRI) Stock in Portfolio
Primerica, Inc.’s (PRI - Free Report) compelling portfolio, strong market presence, solid capital position and favorable growth estimates make it worth retaining in one’s portfolio.
Zacks Rank & Price Performance
Primerica currently carries a Zacks Rank #3 (Hold). In the past six months, the stock has rallied 21.7%, outperforming the industry’s increase of 7.8%.
Image Source: Zacks Investment Research
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 has moved 0.3% north in the past 30 days, reflecting analyst optimism.
Optimistic Growth Projections
The Zacks Consensus Estimate for Primerica’s 2023 earnings is pegged at $13.18, indicating a 20.2% increase from the year-ago estimated figure on 4.9% higher revenues of $2.9 billion.
Growth Drivers
Primerica, the second-largest issuer of term-life insurance coverage in North America, remains focused on emerging as a successful senior health business while continuing to enhance its shareholders’ value.
The insurer is poised to gain from strong demand for protection products that in turn should drive sales growth and policy persistency. PRI’s strong business model makes it well poised to cater to the middle market's increased demand for financial security.
The insurer stays focused on increasing the size of life license sales force
through continued recruiting and licensing. Licensed representatives play a major role in driving operational results for PRI. The insurer thus remains focused on growing licensed representatives.
Given mid-single-digit sales growth, PRI expects ADP growth to hover around 6% per year for the next three years.
With the U.S. mortgage distribution business gaining traction, Primerica remains focused on expanding distribution. However, given an improving interest rate environment, PRI expects growth to be muted in this segment.
Life insurers are direct beneficiaries of an improving interest rate environment. The Fed raised interest rates seven times in 2022, with more on the horizon this year. At its December meeting, the Fed indicated taking the interest rate to 5.1% in 2023 to combat its expected 3.1% inflation. Thus, an improving interest rate environment should aid net investment income.
The insurer had solid liquidity with cash and cash equivalents. Primerica has been strengthening its balance sheet by improving its leverage ratio. PRI scores strongly with credit rating agencies.
Primerica has a solid dividend history banking on operational excellence of Term Life and ISP businesses. It has hiked dividends 10 times in the last nine years. The insurer also engages in share buyback. PRI expects the Term Life business to be the primary source of deployable capital
The company has a VGM Score of B.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Root, Inc. (ROOT - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and First American Financial Corporation (FAF - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 91.3%.
The Zacks Consensus Estimate for ROOT’s 2023 earnings indicates a year-over-year increase of 23.9%.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. In the past year, KNSL has gained 25.1%.
The Zacks Consensus Estimate for KNSL’s 2023 earnings implies a year-over-year rise of 22.6%.
First American has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, FAF has lost 25.9%.
The Zacks Consensus Estimate for FAF’s 2023 earnings has moved 3.9% north in the past 60 days.