Protective Life Hits 52-Week High on Strong Q3 Earnings

On Nov 12, 2014, the shares of Protective Life Corp. (PL) hit a 52-week high of $70.03. The rise in the stock was propelled by strong third-quarter earnings which outpaced the Zacks Consensus Estimate by 9.9%. About 765,071 shares exchanged hands in the last session.

Since the beginning of 2014, the stock is up a whopping 40.8%, significantly higher than the S&P 500’s increase of 11.3% over the same time frame.

Growth Drivers

Protective Life’s strong third-quarter financial performance was a continuation of superior results and impressive revenue and earnings growth.

Protective Life’s operating income of $1.33 per share surpassed the Zacks Consensus Estimate of $1.21 and improved a significant 36% year over year. The company’s top line also grew 20.5% year over year to $1.15 billion and beat the Zacks Consensus Estimate of $1.14 billion.

Investors are optimistic about the stock given that Protective Life delivered a positive surprise in each of the last four quarters, with an average beat of 15.6%.

Investors appreciate the insurer’s diverse revenue and earnings sources, significant presence in the life insurance market, multiple distribution channels, manageable cash outflows at the holding company, and a solid track record that reflects it competence to acquire other companies and blocks of businesses.

The company is awaiting a merger with by Dai-ichi which is expected to close by late 2014 or early 2015. The transaction is being positively viewed by the followers of the company since it will provide immense diversification benefits, helping it to transform from a national to an international player.

Protective Life carries a Zacks Rank #3 (Hold). Better-ranked stocks include Lincoln National Corporation (LNC), StanCorp Financial Group Inc. (SFG) and China Life Insurance Co. Ltd. (LFC). All these stocks carry a Zacks Rank #2 (Buy).