On Nov 28, Zacks Investment Research upgraded Primerica, Inc. (PRI) to a Zacks Rank #2 (Buy).
Why the Upgrade?
Primerica has been witnessing rising earnings estimates on the back of solid third-quarter 2013 results. The long-term expected earnings growth rate for this stock is 10%.
Primerica reported third-quarter results on Nov 6. Non-GAAP earnings per share came in at 78 cents, surpassing the Zacks Consensus Estimate of 76 cents by 2.6%. It improved 8.3% year over year.
Earnings were primarily aided by a solid top-line growth of 8.0% driven by strong Investment and Savings Products performance and growth in Term Life net premium.
Life-licensed sales force increased to 94,529 at Sep 30, 2013 from 91,506 at Sep 30, 2012. Term life insurance policies issued in the third quarter increased 1% year over year.
Cash and cash equivalents at third quarter end improved 31.4% over 2012. Return on equity was 15.8% for the quarter. The company’s quarterly dividend of 11 cents currently yields 1.02%.
The Zacks Consensus Estimate for 2013 increased 0.7% to $2.91 per share as most of the estimates were revised higher over the last 30 days. For 2014, two of 4 estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 0.6% to $3.28 per share of Primerica.
Other Stocks to Consider
Other insurers, which look attractive at current levels, include StanCorp Financial Group Inc. (SFG) and Old Republic International Corp. (ORI) with Zacks Rank #1 (Strong Buy). American Equity Investment Life Holding Co. (AEL) in the same sector comes with a Zacks Rank #2.