On Dec 23, 2013, shares of
StanCorp Financial Group Inc
) hit a 52-week high of $66.06.
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The momentum was driven by continued outperformance by StanCorp
and dividend hike.
StanCorp's third-quarter 2013 earnings of $1.45 per share
exceeded the Zacks Consensus Estimate by 39% and the year-ago
quarter figure by 38%. Results reflected increased favorable
claims experience in the group insurance business and higher
earnings in the company's Asset Management segment.
With respect to earnings trend, StanCorp delivered positive
earnings surprise in the past 4 quarters, with an average of
StanCorp's Asset Management segment has been witnessing a
substantial improvement in the past five quarters. Results
benefited from higher administrative fee revenues and net
investment income stemming from an increase in assets under
administration and lower benefits to policyholders due to
favorable mortality experience in the individual annuity
The company stays focused upon returning value to its
shareholders. In the first nine months, the company spent $70.9
million to repurchase 1.45 million shares, substantially up from
$10 million spent to buy back 0.3 million shares. The board of
directors also approved 18% increase in its annual cash dividend.
The life insurer will now pay an annual dividend of $1.10 per
StanCorp has also witnessed an uptick in its Zacks Consensus
Estimate. The Zacks Consensus Estimate for 2013 rose 11.6% to
$5.02 as all the estimates rose over the last 60 days. The same
for 2014 increased 6.2% over the same time frame as all the
estimates again moved north. The expected long-term growth rate
for the stock is about 13.1%.
Valuation for StanCorp looks attractive. The shares are trading
at a discount to the peer group average on a forward
price-to-earnings basis. Return on equity is higher than the peer
group average. The year-to-date return from the stock was 79.8%,
much above the S&P's return of 28.2%.
StanCorp presently carries a Zacks Rank #3 (Hold). Better-ranked
stocks in the life insurance sector include
American Equity Investment Life Holding Co.
Reinsurance Group of America Inc
). All these stocks carry a Zacks Rank #2 (Buy).