On Dec 23, 2013, shares of StanCorp Financial Group Inc. (SFG) hit a 52-week high of $66.06.
The momentum was driven by continued outperformance by StanCorp and dividend hike.
StanCorp’s third-quarter 2013 earnings of $1.45 per share exceeded the Zacks Consensus Estimate by 39% and the year-ago quarter figure by 38%. Results reflected increased favorable claims experience in the group insurance business and higher earnings in the company’s Asset Management segment.
With respect to earnings trend, StanCorp delivered positive earnings surprise in the past 4 quarters, with an average of 28.3%.
StanCorp’s Asset Management segment has been witnessing a substantial improvement in the past five quarters. Results benefited from higher administrative fee revenues and net investment income stemming from an increase in assets under administration and lower benefits to policyholders due to favorable mortality experience in the individual annuity business.
The company stays focused upon returning value to its shareholders. In the first nine months, the company spent $70.9 million to repurchase 1.45 million shares, substantially up from $10 million spent to buy back 0.3 million shares. The board of directors also approved 18% increase in its annual cash dividend. The life insurer will now pay an annual dividend of $1.10 per share.
StanCorp has also witnessed an uptick in its Zacks Consensus Estimate. The Zacks Consensus Estimate for 2013 rose 11.6% to $5.02 as all the estimates rose over the last 60 days. The same for 2014 increased 6.2% over the same time frame as all the estimates again moved north. The expected long-term growth rate for the stock is about 13.1%.
Valuation for StanCorp looks attractive. The shares are trading at a discount to the peer group average on a forward price-to-earnings basis. Return on equity is higher than the peer group average. The year-to-date return from the stock was 79.8%, much above the S&P’s return of 28.2%.
StanCorp presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the life insurance sector include American Equity Investment Life Holding Co. (AEL), Reinsurance Group of America Inc. (RGA) and Primerica, Inc. (PRI). All these stocks carry a Zacks Rank #2 (Buy).
Read the Full Research Report on AEL
Read the Full Research Report on RGA
Read the Full Research Report on PRI
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