On Sep 14, Zacks Investment Research upgraded StanCorp Financial Group Inc. (SFG) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
StanCorp Financial has been witnessing rising earnings estimates on the back of strong second-quarter 2013 results. Moreover, this life insurer delivered positive earnings surprises in the last 4 quarters with an average beat of 31.5%. The long-term expected earnings growth rate for this stock is 7%.
StanCorp Financial reported second quarter results on Jul 23. Non-GAAP earnings per share came in at $1.31 per share, surpassing the Zacks Consensus Estimate by 33%. Results were way ahead of the 51 cents earned in the prior-year quarter.
The improvement came on the back of a decline in operating expenses, more favorable claims experience in the group long-term disability insurance business, and higher earnings in the company’s Asset Management segment.
Net investment income of StanCorp improved 1.8% year over year in the reported quarter.
Total benefits and expenses of StanCorp declined 9.1% year over year, attributable to lower benefits to policyholders, operating expense, premium taxes, and interest expense.
StanCorp Financial spent $16.9 million to buy back 0.38 million shares in the reported quarter and is left with 2.4 million shares under its authorization.
Cash and cash equivalents for StanCorp improved 24.3% from year-end 2012.
Book value per share increased 7.8% year over year to $44.16, as of Jun 30, 2013.
The Zacks Consensus Estimate for fiscal 2013 increased 10.7% to $4.43 per share as most of the estimates were revised higher over the last 60 days. For 2014, most of the estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 5.5% to $4.60 per share.
Other Stocks to Consider
Life insurers Lincoln National Corporation (LNC), China Life Insurance Co. Ltd. (LFC), and Health Insurance Innovations, Inc. (HIIQ), each carrying a Zacks Rank #1 (Strong Buy) are worth considering.