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Primerica (PRI) Rallies 19% YTD: Will the Bull Run Continue?
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Primerica (PRI - Free Report) shares have rallied 19.4% year to date, outperforming 6.8%, 3.2% and 7.9% growth of the industry, the Finance sector and the Zacks S&P 500 composite, respectively, in the same period. With a market capitalization of $8.5 billion, the average volume of shares traded in the last three months was 0.1 million.
A compelling portfolio, strong market presence and solid capital position continue to drive this Zacks Rank #2 (Buy) stock. Earnings of this second-largest issuer of term-life insurance coverage in North America have risen 17.6% over the last five years, outperforming the industry average of 2%.
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 5 cents and 7 cents north, respectively, in the past 30 days, reflecting analysts’ optimism. Primerica envisions being a successful senior health business while continuing to enhance its shareholders’ value.
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders’ funds, has been improving over the last several years. PRI’s trailing 12-month ROE of 27.8% is better than the industry average of 15.4%.
Also, the return on invested capital (ROIC) in the trailing 12 months was 7%, better than the industry average of 0.7%, reflecting PRI’s efficiency in utilizing funds to generate income.
Image Source: Zacks Investment Research
Can it Retain the Momentum?
The Zacks Consensus Estimate for Primerica’s 2024 earnings is pegged at $17.75 per share, indicating an increase of 10.5% on 5.5% higher revenues of $3 billion. The Zacks Consensus Estimate for Primerica’s 2025 earnings is pegged at $19.53 per share, indicating an increase of 10% on 4.7% higher revenues of $3.1 billion.
PRI noted that 48% of middle-income Americans will not be ready for retirement based on their investment and savings habits. Thus, life-licensed sales representatives play a major role in capitalizing on the sea of growth opportunities. Management estimates a 3% rise in sales force size in 2023.
Licensed representatives act as catalysts contributing to operational results for the insurer. The insurer estimates a 3-5% rise in the number of Term Life policies and a 5% rise in Investment and Savings Products sales.
Sales growth and policy persistency should continue to benefit from strong demand for protection products. A strong business model makes it well-poised to cater to the middle market's increased demand for financial security.
Life insurers are direct beneficiaries of an improving interest rate environment. An improved interest rate environment should aid net investment income.
Apart from having solid liquidity, Primerica has been strengthening its balance sheet by improving its leverage ratio. It scores strongly with credit rating agencies.
Management believes that its solid Term-life insurance business ensures consistent free cash flow. Banking on this strength, the board recently approved a $425 million buyback program through next year apart from hiking dividends 11 times in the last 10 years. Dividends increased at a five-year CAGR of 9.8%. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Employers Holdings delivered a four-quarter average earnings surprise of 20.4%. The stock has gained 11.8% year to date. The Zacks Consensus Estimate for EIG’s 2024 and 2025 earnings has moved 6.6% and 8.8% north, respectively, in the past 30 days.
Manulife delivered a four-quarter average earnings surprise of 7.01%. The stock has gained 9.8% year to date. The Zacks Consensus Estimate for MFC’s 2024 and 2025 earnings suggests growth of 5.5% and 9.7%, respectively, from a year ago.
Unum Group beat estimates in three of the last four quarters while missing in one. The stock has gained 14.1% year to date. The Zacks Consensus Estimate for UNM’s 2024 and 2025 earnings implies a 6.8% and 7.3% increase, respectively, from the year-ago figures.
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Primerica (PRI) Rallies 19% YTD: Will the Bull Run Continue?
Primerica (PRI - Free Report) shares have rallied 19.4% year to date, outperforming 6.8%, 3.2% and 7.9% growth of the industry, the Finance sector and the Zacks S&P 500 composite, respectively, in the same period. With a market capitalization of $8.5 billion, the average volume of shares traded in the last three months was 0.1 million.
A compelling portfolio, strong market presence and solid capital position continue to drive this Zacks Rank #2 (Buy) stock. Earnings of this second-largest issuer of term-life insurance coverage in North America have risen 17.6% over the last five years, outperforming the industry average of 2%.
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 5 cents and 7 cents north, respectively, in the past 30 days, reflecting analysts’ optimism. Primerica envisions being a successful senior health business while continuing to enhance its shareholders’ value.
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders’ funds, has been improving over the last several years. PRI’s trailing 12-month ROE of 27.8% is better than the industry average of 15.4%.
Also, the return on invested capital (ROIC) in the trailing 12 months was 7%, better than the industry average of 0.7%, reflecting PRI’s efficiency in utilizing funds to generate income.
Image Source: Zacks Investment Research
Can it Retain the Momentum?
The Zacks Consensus Estimate for Primerica’s 2024 earnings is pegged at $17.75 per share, indicating an increase of 10.5% on 5.5% higher revenues of $3 billion. The Zacks Consensus Estimate for Primerica’s 2025 earnings is pegged at $19.53 per share, indicating an increase of 10% on 4.7% higher revenues of $3.1 billion.
PRI noted that 48% of middle-income Americans will not be ready for retirement based on their investment and savings habits. Thus, life-licensed sales representatives play a major role in capitalizing on the sea of growth opportunities. Management estimates a 3% rise in sales force size in 2023.
Licensed representatives act as catalysts contributing to operational results for the insurer. The insurer estimates a 3-5% rise in the number of Term Life policies and a 5% rise in Investment and Savings Products sales.
Sales growth and policy persistency should continue to benefit from strong demand for protection products. A strong business model makes it well-poised to cater to the middle market's increased demand for financial security.
Life insurers are direct beneficiaries of an improving interest rate environment. An improved interest rate environment should aid net investment income.
Apart from having solid liquidity, Primerica has been strengthening its balance sheet by improving its leverage ratio. It scores strongly with credit rating agencies.
Management believes that its solid Term-life insurance business ensures consistent free cash flow. Banking on this strength, the board recently approved a $425 million buyback program through next year apart from hiking dividends 11 times in the last 10 years. Dividends increased at a five-year CAGR of 9.8%. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Employers Holdings (EIG - Free Report) , Manulife Financial Corporation (MFC - Free Report) and Unum Group (UNM - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Employers Holdings delivered a four-quarter average earnings surprise of 20.4%. The stock has gained 11.8% year to date. The Zacks Consensus Estimate for EIG’s 2024 and 2025 earnings has moved 6.6% and 8.8% north, respectively, in the past 30 days.
Manulife delivered a four-quarter average earnings surprise of 7.01%. The stock has gained 9.8% year to date. The Zacks Consensus Estimate for MFC’s 2024 and 2025 earnings suggests growth of 5.5% and 9.7%, respectively, from a year ago.
Unum Group beat estimates in three of the last four quarters while missing in one. The stock has gained 14.1% year to date. The Zacks Consensus Estimate for UNM’s 2024 and 2025 earnings implies a 6.8% and 7.3% increase, respectively, from the year-ago figures.