StanCorp Upped to Outperform - Analyst Blog


On May 29, 2013, we upgraded StanCorp Financial Group Inc . ( SFG ) to Outperform from Neutral based on its strong first-quarter results and efforts to reduce operating costs. This life insurer currently carries a Zacks Rank #1 (Strong Buy).

Why the upgrade?

StanCorp Financial reported first-quarter 2013 net operating earnings of $1.07 per share, which exceeded the Zacks Consensus Estimate by 33.8% and the year-ago earnings by 35.4%. Over the past four quarters, StanCorp Financial has delivered an average surprise of 21.1%.

Following the release of the first-quarter results, the Zacks Consensus Estimate for 2013 moved up 1% to $3.96. Moreover, the Zacks Consensus Estimate for 2014 has also increased 1.4% to $4.28.

What is the cause for the strong positive bias on the company? Apart from the strong first-quarter results, which benefited from a decline in operating expenses, StanCorp's investment portfolio continues to perform well with no considerable exposure to high-risk asset classes.

StanCorp's Asset Management segment continues to deliver better numbers. The segments contribution to total revenue increased as well.

StanCorp enjoys a strong capital position, enabling it to remain focused on enhancing shareholder value. StanCorp envisions buybacks between $40 million and $80 million in 2013.  Additionally, in Nov 2012, the board approved a 4.5% hike in dividend, marking the 13th consecutive year of dividend hikes. Its annual dividend increased 24% since 2008. The current dividend yield stands at 2.13%, much above the industry average of 1.50% as well as some of other life insurers like Protective Life Corporation ( PL ) (2.09%) and American Equity Investment Life Holding Co . ( AEL ) (0.95%).

Other Stocks to Consider

Besides StanCorp Financial, another stock in the life insurance sector worth noting is China Life Insurance Co. Ltd . ( LFC ) with a Zacks Rank #2 (Buy).

AMER EQUITY INV (AEL): Free Stock Analysis Report

CHINA LIFE INS (LFC): Free Stock Analysis Report

PROTECTIVE LIFE (PL): Free Stock Analysis Report

STANCORP FNL CP (SFG): Free Stock Analysis Report

To read this article on click here.

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: AEL , LFC , PL , SFG

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