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Primerica (PRI) Stock Up 15% YTD: Is There More Room to Run?

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Shares of Primerica, Inc. PRI have gained 14.9% year to date (YTD), outperforming the industry’s increase of 5.4%. With a market capitalization of $6.1 billion, the average volume of shares traded in the last three months was 0.1 million.

Primerica boasts a stockholder return of 200% over the last five years, outperforming the S&P 500 Insurance Index’s 56%.

A compelling portfolio, strong market presence and a sturdy financial position continue to drive Primerica, which beat earnings estimates in two of the last four quarters, while missed the same in the other two, the average surprise being 3.26%.

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Return on equity in the trailing 12 months was 22.6%, better than the industry average of 11.4%, reflecting PRI’s efficiency in utilizing shareholders’ fund.

Can PRI Stock Retain the Momentum?

The Zacks Consensus Estimate for 2021 and 2022 earnings has moved up 0.3% and 0.8%, respectively, in the past 30 days, reflecting analysts’ optimism.

The Zacks Consensus Estimate for 2021 indicates a year-over-year improvement of 22.8% on 20.7% higher revenues. The consensus estimate for 2022 indicates a year-over-year improvement of 12.8% on 11.3% higher revenues.

Primerica believes that it is well poised to cater to the middle market's increased demand for financial security due to its strong business model. After acquiring an 80% stake in TeleQuote, Primerica introduced the Senior Health segment that added senior health offerings to its financial solutions for the middle-income families.

Primerica boasts being the second-largest issuer of term life insurance coverage in North America with solid demand for the protection products, driving sales growth and policy persistency. It expects 12% growth in adjusted direct premiums in the fourth quarter of 2021. While Investment and Savings Products sales are estimated to rise between 20% and 25% in the fourth quarter, the same is expected to increase 40% in 2021.

With sales normalizing, Primerica guides sales in the Term Life segment to increase more than 10% from the pre-pandemic levels in 2021. Margin is expected between 19-20% in the fourth quarter of 2021.

Zacks Rank #3 (Hold) PRI’s U.S. mortgage distribution business is also gaining traction. Thus, the company remains focused on expanding distribution.

Primerica’s leverage ratio has been improving, while the times interest earned has increased over the last two years. PRI scores strongly with credit rating agencies.

Primerica remains focused on driving value by expanding its business and generating capital to return to its stockholders. The board of directors recently approved a $275 million repurchase program through next year and raised dividend 10 times in the last nine years.

Primerica is well poised to progress as evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all the three factors.

Stocks to Consider

Some better-ranked stocks from the insurance space include American Equity Investment Life Holding AEL, Athene Holding ATH and Old Republic International ORI.

American Equity sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for 2021 and 2022 earnings has moved up 3.9% and 5.1% in the past 30 days. American Equity delivered a four-quarter average earnings surprise of 31.49%.

The Zacks Consensus Estimate for 2021 earnings of Athene, carrying a Zacks Rank #2 (Buy), has moved up 9.9% in the past 30 days and implies 123.7% year-over-year growth. Athene delivered a four-quarter average earnings surprise of 46.12%.

Old Republic International sports a Zacks Rank #1. The Zacks Consensus Estimate for 2021 and 2022 earnings has moved up 11.5% and 12.5% in the past 30 days. Old Republic delivered a four-quarter average earnings surprise of 54.63%.

Shares of AEL, ATH and ORI have gained 32.6%, 101.2% and 25.2%, respectively, year to date.


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American Equity Investment Life Holding Company (AEL) : Free Stock Analysis Report

Primerica, Inc. (PRI) : Free Stock Analysis Report

Old Republic International Corporation (ORI) : Free Stock Analysis Report

Athene Holding Ltd. (ATH) : Free Stock Analysis Report

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