The board of directors of Primerica, Inc. (PRI - Free Report) recently authorized a share buyback program to return more to its shareholders. The latest authorization will allow the company to spend up to $200 million to repurchase its common stock, through Jun 30, 2018. Shares gained 1.1% in the last trading session reflecting investor’s optimism over the company’s effective capital deployment activities.
Earlier, the company approved a share buyback program for up to $200 million for purchases through Dec 31, 2016. Notably, under this program – announced in Aug 2015 – the company bought back shares of around $181.5 million through Sep 30, 2016. With the new authorization, the company now has $218.5 million left under the buyback program as of Sep 30, 2016.
Primerica is on track to meet the financial demands of the middle market and deliver a solid business opportunity to entrepreneurs. The company’s robust performance should support it in these endeavors. The insurer’s life insurance sales force and term life insurance policies issued registered double-digit growth in the third quarter of 2016, while earnings per share and return on equity improved considerably on a year-over-year basis.
Moreover, Primerica’s financial strength allows it to execute share repurchases successfully. As of Sep 30, 2016, the company had cash and cash equivalents worth $195.3 million, up 28.3% from the 2015-end level. Operating cash flow in the first nine months of 2016 was approximately $164.9 million (up 16.9% year over year). A strong liquidity position enables the company to engage in share buybacks and boost shareholders’ value.
Share repurchases benefit the company’s earnings per share, book value as well as shareholder equity as shares outstanding reduce. Therefore, share repurchase programs raise optimism among investors and boost their confidence on a stock.
Currently, Primerica holds a Zacks Rank #2 (Hold).
Other Stocks to Consider
Other well-ranked stocks from the insurance industry that warrant a look include Alleghany Corporation (Y - Free Report) , NMI Holdings, Inc. (NMIH - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alleghany Corporation deals with Property & Casualty reinsurance and insurance businesses in the U.S. and internationally. The company delivered positive surprises in three of the last four quarters, with an average beat of 20.52%.
NMI Holdings offers private mortgage guaranty insurance services in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarter with an average beat of 9.27%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time? Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>