On Jul 6, 2013, Zacks Investment Research upgraded Symetra Financial Corporation (SYA) to a Zacks Rank #1 (Strong Buy) in view of the scheduled divestiture of the Symetra Investment Services (:SIS) which is expected to bring long-term profitability for the company.
Reasons for Upgrade
In Jun 2013, Symetra Financial entered into an agreement with John Hancock, an operating unit of Manulife Financial Corporation (MFC) to divest one of its subsidiaries, Symetra Investment Services. SIS was not a much profitable unit of SYA and thus the company decided to divest it. Apart from fetching cash this divestiture is expected to help the company concentrate on core operations, thereby boosting profitability.
Besides, Symetra Financial continues to increase shareholders’ value through dividend payouts and share repurchases. In May this year, Symetra Financial declared a cash dividend of 8 cents per share which represents a 14.3% hike over its previous dividend level. Earlier in the first quarter, the company deployed $4.2 million to repurchase 0.3 million shares.
The company has beaten the Zacks Consensus Estimates in two of the past four quarters. Its first-quarter 2013, results were strong, including an 8.8% positive earnings surprise.
The Zacks Consensus Estimate for 2013 increased 2.2% to $1.41 per share as many estimates were revised upwards over the last 90 days, reflecting a year-over-year increase of 5.5%. Over the same time frame, the Zacks Consensus Estimate for 2014 increased 2.7% to $1.51 per share, representing a year-over-year increase of 6.8%.
Symetra Financial is scheduled to release its second quarter 2013 earnings results on Jul 24, 2013. The Zacks Consensus Estimate for the second quarter 2013 is currently pegged at 34 cents per share.
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