On Mar 7, 2014, shares of
Genworth Financial Inc
) touched a new 52-week high of $17.05. The momentum was driven
by solid fourth-quarter and full-year 2013 earnings results at
the company. The one-year return from the stock came in at 72.3%,
way ahead of the S&P's return of 23.9%.
The fourth-quarter earnings figure at Genworth clocked a positive
surprise beat of 27%. This helped the life insurer deliver
positive earnings surprises in 2 of the last 4 quarters, thus
registering an average beat of 5.8%. Full-year 2013 earnings also
exceeded the Zacks Consensus Estimate by 12% and the 2012 number
by a whopping 51%.
Genworth witnessed robust performance at the U.S Mortgage
Insurance (MI) and U.S. Life Insurance segments. Improving
housing market and loss profile in the United States, and stable
markets and lower losses in Australia and Canada aided the
positives. The long-term care insurance continues to
benefit from progress on rate actions.
Total flow delinquencies moved south by 26% and new flow
delinquencies declined 21% year over year. As flow modifications
remained strong, Genworth's loss mitigation savings of $563
million in 2013 exceeded the target of $250 million to $350
million. The company hence envision higher earnings for
U.S. MI in 2014 as compared to 2013
In addition, Genworth's progress on the premium rate increases
approvals remains on track. As of Dec 31, 2013, the company
received approvals of about $195 million to $200 million of the
annual premium increases from 41 states. It expects the pretax
incremental premiums from the rate actions between $150 million
and $175 million in 2014. Also, based on the in-force rate action
approvals, the company expect the rate actions to benefit
earnings by about $120 million to $150 million in 2014.
Genworth also expects that, with more permanent life insurance
and hybrid product offerings in its portfolio, life sales will
increase over time.
Genworth presently carries a Zacks Rank #3 (Hold). Some
better-ranked life insurers worth considering are
Protective Life Corp.
Lincoln National Corp.
). All these stocks carry a Zacks Rank #2 (Buy).
GENWORTH FINL (GNW): Free Stock Analysis
LINCOLN NATL-IN (LNC): Free Stock Analysis
PROTECTIVE LIFE (PL): Free Stock Analysis
PRIMERICA INC (PRI): Free Stock Analysis
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