On Dec 31, Zacks Investment Research upgraded FBL Financial Group Inc. (FFG) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
FBL Financial witnessed an increase in earnings estimates following the rating upgrade by A.M. Best and solid third-quarter earnings.
A.M. Best upgraded the issuer credit ratings (ICR) to “bbb” from “bbb-” of FBL Financial. Subsequently, the rating agency upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the ICR to “a” from “a-” of Farm Bureau Life Insurance Company, its primary operating subsidiary. The ratings carry a stable outlook. Rating affirmations or upgrades from credit rating agencies play an important role in retaining investors’ confidence in the stock as well as maintaining creditworthiness in the market. The recent upgrade hence instills further optimism and will help it write more business, going forward.
With respect to financial results, the company delivered operating net earnings of $1.18 per share in the third quarter, outperforming the Zacks Consensus Estimate by 22.9%, apart from improving year over year. Higher-than-expected bond prepayments, favorable mortality results, expense management, increased equity income from investments in low income housing tax credit partnerships and investment companies, share repurchases and strong business portfolio drove the outperformance. The multiline insurer delivered positive surprise in three out of the last four quarters with an average beat of 10.89%.The quarter also incurred lower expenses.
These positives resulted in an upward revision in the Zacks Consensus Estimate for 2014 and 2015 over the last 60 days. The same moved up 2.8% to $4.01 for 2014 and 0.5% to $4.05 for 2015.
Other 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 shares the Zacks Rank with FBL Financial, AIG and Cigna carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment