On Dec 1, 2014, shares of Fortegra Financial Corporation (FRF) scaled a 52-week high of $10.00 buoyed by a solid third-quarter earnings beat. With about 0.02 million shares exchanging hands in the last trading session, the stock closed at $9.91.
The year-to-date return from the stock came in at 19.82%, which was ahead of the S&P’s return of 11.09%. With respect to earnings performance, this life insurer has delivered positive surprises in two of the last four quarters with an average beat of 6.22%.
In the third quarter of 2014, Fortegra Financial delivered earnings of 20 cents per share that outperformed the Zacks Consensus Estimate by 17.65% and improved 33% year over year. The upside came on the back of organic revenue increases in payment protection products and a lower claims cost.
Revenues rose year over year on strong management of ProtectCELL member benefit claims costs and volume growth in payment protection products.
While direct and assumed written premiums exhibited improvement, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) and adjusted EBITDA margin also increased year over year.
On the other hand, expenses declined on the back of lower member benefit claims as well as lower commissions.
Fortegra Financial exited the third quarter with cash and investments of $168 million, up from $160 million at the end of 2013. As of Sep 30, 2014, shareholders equity was $179.4 million, up from $166.5 million as of Dec 31, 2013.
A solid quarterly performance has prompted the Zacks Consensus Estimate to increase 4.1% to 77 cents for 2014. Fortegra Financial presently carries a Zacks Rank #2 (Buy).
Stocks to Consider
Investors interested in multiline insurers may also look at CNO Financial Group, Inc. (CNO), American International Group, Inc. (AIG) and Cigna Corp. (CI). While CNO Financial sports a Zacks Rank #1 (Strong Buy), AIG and Cigna hold the same Zacks Rank as Fortegra Financial.
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