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Primerica (PRI) OKs $425M Buyback Program to Share More Profit

The board of directors of Primerica, Inc. PRI authorized a share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $425 million to repurchase its common stock through next year. This also reflects an increase of $50 million from the year-ago approval of $325 million.

Primerica had $72.5 million available for repurchase as of Sep 30, 2023. Under the last authorization, the insurer bought back 1.7 million shares for $302.5 million through the first nine months of 2023. The insurer remains confident of exhausting its $375 million buyback program for 2023, banking on the strength of its capital and liquidity positions.

Primerica is the second-largest issuer of term life insurance coverage in North America, with solid demand for protection products driving sales growth and policy persistency. Riding on the strength of its business model, Primerica is well-poised to cater to the middle market's increased demand for financial security.

This Zacks Rank #2 (Buy) life insurer’s Term-life face amount in force exceeded $937 billion, while client asset values were almost $91.5 billion as of Sep 30, 2022. Management believes that its solid Term-life insurance business ensures consistent free cash flow. Banking on this strength, the board increased its share buyback approval. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sustained operational excellence helped Primerica’s total stockholder returns outperform the S&P 500 Index over the last five years.

Shares of PRI have surged 44% year to date, outperforming the industry’s increase of 11.3%. A compelling portfolio, strong market presence and sturdy financial position continue to drive Primerica.

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Given a solid capital level in the insurance industry and an improving operating backdrop favoring strong operational performance, insurers like Brighthouse Financial, Inc. BHF, RLI Corp. RLI and Assurant Inc. AIZ have resorted to effective capital deployment to enhance shareholders’ value.

The board of directors of Brighthouse Financial recently announced the authorization to buy back up to $750 million of the company’s common shares. The insurer’s sales remained at a high level, which helped deliver on the commitment to return capital to shareholders. BHF remains confident of its life insurance strategy, which involves the addition of new distribution partners and additional wholesalers.

RLI’s board of directors approved a special cash dividend of $2.00 per share, marking the 14th straight special dividend. RLI’s diversified product portfolio, strong local branch-office network, focus on specialty insurance lines growth via organic opportunities, and acquisitions and financial strength should continue to help boost shareholders’ returns. RLI boasts shareholders’ returns of 16.2% in the past 20 years, outperforming the S&P 500 and the S&P P&C Index. This insurer is one of the industry’s most profitable P&C writers, with an impressive track record of delivering 27 consecutive years of underwriting profitability.

In November 2023, Assurant’s board approved a 3% hike in its quarterly dividend. The recent hike marked the 19th consecutive dividend increase by Assurant since its initial public offering in 2004. Effective capital deployment highlights AIZ’s commitment toward prudent capital management, reflecting its sustained operational performance over a period of time and its sound financial prospects.

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