Primerica Hits 52-Week-High on Strong Q2 Operating Results - Analyst Blog


On Aug 27, 2014, shares of Primerica, Inc. ( PRI ) scaled a 52-week high of $50.81 on a second-quarter earnings beat. With about 0.1 million shares exchanging hands in the last trading session, shares closed at $50.76, gaining 1.4%.

The year-to-date return from the stock came in at 18.3%, which was ahead of the S&P return of 8.2%.

With respect to earnings performance, this life insurer delivered positive surprises in three of the last four quarters with an average beat of 2.6%. In second-quarter 2014, Primerica recorded a net operating income of 88 cents per share that was higher than the Zacks Consensus Estimate by 6% and year-ago quarter figure by 25%. The performance was primarily attributable to improvement in Term Life premiums as well as Investment and Savings Products.

Primerica reported total revenue of $331 million, which marginally came ahead of the Zacks Consensus Estimate. It also improved year over year by 9.1% driven by increase in net premiums as well as commissions and fees.

The quarter witnessed lower expenses due to the settlement of the Florida Retirement System (FRS) in first-quarter 2014.

As part of Primerica's efforts to improve shareholders' value, Primerica completed reserve financing transaction on Jul 31, 2014. The move will enable the company to deploy capital worth $150 million annually through 2016. Additionally, in the reported quarter, the company repurchased 0.5 shares worth $21.9 million taking the year to date tally to 0.8 million shares bought back for a total of $35 million.

On the strength of its solid operational performance, Primerica generated return on equity was 15.4% in the second quarter, improving from 14.2% in the year ago quarter.

This Zacks Rank #3 (Hold) stock has been witnessing upward revisions in the Zacks Consensus Estimate in the last 30 days. For 2014, the Zacks Consensus Estimate moved north by 1.2% to $3.35 per share as 3 of 4 estimates moved up, while for 2015, it rose 1.6% to $3.74 as 1 of 4 estimates moved north.

Last week, another life insurer Voya Financial, Inc. ( VOYA ) reported a 52 week-high of $38.88 on solid second-quarter 2014 performance.

Stocks to Consider

Investors interested in life insurance companies could consider stocks like Fidelity & Guaranty Life Common ( FGL ) and Health Insurance Innovations, Inc. ( HIIQ ). While Fidelity & Guaranty Life Common sports a Zacks Rank #1 (Strong Buy), Health Insurance Innovations has a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

HEALTH INS INN (HIIQ): Free Stock Analysis Report

PRIMERICA INC (PRI): Free Stock Analysis Report

FIDELITY&GUARNT (FGL): Free Stock Analysis Report

VOYA FINANCIAL (VOYA): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: FRS , HIIQ , PRI , FGL , VOYA

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