In its concerted effort to enhance shareholder value, the
board of directors of
StanCorp Financial Group, Inc
) authorized the company to repurchase 3 million shares by Dec
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The new buyback authorization will be effective as soon as the
current one exhausts. The existing authorization - approved in
Nov 2012 - is set to expire in 2014. Back then, the board had
approved a similar 3 million share repurchase program. Under the
existing authorization, the company had 1.4 million shares
remaining for buyback as of Dec 31, 2013.
In the fourth quarter of 2013, StanCorp repurchased 0.19 million
shares for $11.4 million, taking the full year tally to 1.6
million shares bought back for $82.3 million. StanCorp has
repurchased $1 billion worth of shares since it went public in
1999. Consistent with its effort to return value to shareholders
leveraging its sturdy capital position, the company envisions
$40-$80 million of share repurchase in 2014.
The new authorization is duly supported by the company's solid
financial position, with cash and cash equivalents of $379.3
million as of the end of 2013 (significantly higher than $160.7
million as of Dec 31, 2012). Retained earnings at year end also
stood solid at $1.9 billion (up 10.2% year over year). A
sustained solid operational performance continues to cushion
StanCorp's sturdy financial position. The life insurer delivered
six straight quarters of positive surprises.
Besides buying back shares, the company has hiked its dividend
consistently each year. StanCorp has increased its dividend at a
7-year CAGR of 9.3%. Its dividend yield of 1.70% figures better
than the industry yield of 1.51%.
Last month, StanCorp reported operating net income of $1.49 per
share for the fourth quarter of 2013, surging 67% year over year
and exceeding the Zacks Consensus Estimate by a substantial
26.3%. StanCorp witnessed robust earnings growth in Employee
Benefits and record earnings in Individual Disability and Asset
Management. While pricing actions implemented started bearing
fruit, efficient expense management lowered operating costs.
Other insurers who are also authorized for share buybacks include
AXIS Capital Holdings Limited
). While AXIS Capital is authorized to buy back $750 million
worth of shares through Dec 31, 2014, Unum Group will be able to
repurchase upto $750 million of shares through Jun 12, 2015.
StanCorp presently carries a Zacks Rank #3 (Hold). With the news
of the share buyback authorization poised to boost investor
confidence in the stock and boost the bottom line, we expect
analysts to raise their estimates going forward and exert upward
pressure on the Zacks Rank.
A better-ranked life insurer worth considering is
) with a Zacks Rank #1 (Strong Buy).