On May 29, 2013, we upgraded
StanCorp Financial Group Inc
) 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
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
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
) (2.09%) and
American Equity Investment Life Holding Co
Other Stocks to Consider
Besides StanCorp Financial, another stock in the life insurance
sector worth noting is
China Life Insurance Co. Ltd
) with a Zacks Rank #2 (Buy).
AMER EQUITY INV (AEL): Free Stock Analysis
CHINA LIFE INS (LFC): Free Stock Analysis
PROTECTIVE LIFE (PL): Free Stock Analysis
STANCORP FNL CP (SFG): Free Stock Analysis
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