On Aug 25, 2014,
Symetra Financial Corporation
) scaled a 52-week high of $23.82 after posting strong
second-quarter financial results, which included an 11.6% positive
earnings surprise. With respect to earnings trend, this life
insurer has delivered positive earnings surprises in the trailing
four quarters with an average beat of 15.9%.
In fact, shares of Symetra Financial rose nearly 6.3% over the last
few trading sessions to close at $23.72, since the company reported
second-quarter earnings results on Jul 24, 2014. Furthermore, the
one-year return on the stock is 29.6%, above the S&P 500's
return of 20.1% as well as that of other players in the insurance
industry like Lincoln National Corp. (
), Voya Financial, Inc. (
) and White Mountains Insurance Group, Ltd. (
) that generated returns of 22.9%, 28.6% and 11.2% respectively
over the same period.
During the second quarter, Symetra Financial's bottom line not only
surpassed the Zacks Consensus Estimate but also improved year over
year on the successful tax credit investment strategy and improved
sales across the three divisions, namely Deferred Annuities, Income
Annuities and Individual Life. In fact, management remained
optimistic and stated that the Benefits, Retirement and Individual
Life segments are slated to generate an increase in sales that will
drive growth going ahead. Additionally, the second quarter
witnessed strong underwriting results in the Benefits segment.
The investment portfolio of Symetra Financial was strong, with
gains realized during the said quarter as against losses in the
comparable period last year. The company's gains from bond sales
increased significantly that contributed to the investment gain. In
terms of financial position, Symetra Finanacial was strong with an
increase in assets and shareholders' equity, and a stable debt
burden. A robust financial position enabled the company to
undertake share repurchases during the quarter that not only
boosted investors' return but also contributed to the upside in
earnings per share (EPS).
Further, management provided encouraging outlook for the second
half of the year. Symetra Financial is expected to come up with
benefit loss ratio of 64%-66% for the second half. Moreover, sales
of fixed to fixed indexed annuities flow and individual life are
expected to increase.
Additionally, management expects premium growth in group life
and disability income to improve. Profitable growth, along with
prudent capital management, is expected to drive Return on Equity
(ROE). Based on these expectations, management of Symetra Financial
reiterated the operating earnings guidance for full-year 2014 at
$1.80-$2.00 per share.
As a result, the Zacks Consensus Estimate for 2014 increased 3.2%
over the last 30 days to $1.93 per share. This estimate lies within
the company's guided range. For 2015 too, most of the estimates
moved north over the same period to pull up the Zacks Consensus
Estimate by 1.6% to $1.91 per share.
Currently, Symetra Financial carries a Zacks Rank #2 (Buy).
Other stocks to consider in the life insurance space include
Lincoln National and Voya Financial. Both have the same Zacks Rank
as Symetra Financial.
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SYMETRA FINL CP (SYA): Free Stock Analysis
VOYA FINANCIAL (VOYA): Free Stock Analysis
LINCOLN NATL-IN (LNC): Free Stock Analysis
WHITE MTN INS (WTM): Free Stock Analysis Report
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