On Mar 14, 2014, we issued an updated research report on
StanCorp Financial Group Inc.
). The company had earlier reported better-than-expected
StanCorp Financial has delivered positive earnings surprises in
each of the last four quarters, with an average beat of 33.03%.
Moreover, this life insurer delivered robust earnings in the
fourth-quarter of 2013 which not only surpassed the Zacks
Consensus Estimate by 26.3% but also climbed 67% on a
StanCorp Financial 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.
After several quarters with a higher benefit ratio, StanCorp is
finally experiencing an improvement in this ratio. The Employee
Benefit segment's benefit ratio was 76.1% in the fourth quarter,
not only improving year over year but also better than the
management guidance of 80%-82%.
For full-year 2013, Employee Benefits' benefit ratio was
78.9%, better than 83.9% in 2012. The improvement was aided by
pricing actions, which have started to bear fruit in the group
insurance businesses. Management expects Employee Benefits'
benefit ratio to range between 77% and 79% in 2014.
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However, implementation of pricing actions, in turn, may
pressurize the StanCorp Financial's top line.
StanCorp Financial enjoys a strong capital position which allows
it to remain focused on enhancing its shareholder value.
Recently, the board of directors of StanCorp Financial authorized
the company to repurchase 3 million shares by Dec 31, 2015. In
addition, StanCorp's investment portfolio continues to perform
well with no considerable exposure to high-risk asset classes.
With respect to estimate revisions, this Zacks Rank #3 (Hold)
life insurer has witnessed a positive movement. For 2014, the
Zacks Consensus Estimate moved north by 4.4% to $8.21 per share
and for 2015, the same moved up by 1.4% to $5.72 over the last 60
Other Stocks to Consider
Some better-ranked stocks worth mentioning in the property and
casualty insurance industry are
Lincoln National Corp.
Protective Life Corp.
). All these stocks sport a Zacks Rank #2 (Buy).