On Jan 18, Zacks Investment Research upgraded Primerica Inc. (PRI) by a notch to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Primerica has been riding on a strong growth momentum ahead of its fourth-quarter and full-year 2013 results, which is estimated to release in early Feb 2014. The growth impetus stems from improved core fundamentals in 2013, strong product portfolio and prudent risk management.
Alongside, favorable market trends should help mitigate risks on investment returns. The company’s recent extension of strategic alliance with AGF Funds further strengthens its market position in Canada, boosting its future growth prospects. Moreover, strong expense management and effective return of capital are deemed impressive by the investors and ratings agencies.
Primerica also outperformed the one-year S&P 500, which posted an increase of 25.4% against a return of 39.1% clocked by the company. Additionally, this life insurer delivered positive earnings surprise of 2.6% during the reported quarter.
On Nov 6, Primerica reported third-quarter 2013 operating earnings per share of 78 cents, which exceeded the Zacks Consensus Estimate of 76 cents and the year-ago quarter number of 72 cents.
Primerica has been experiencing rising earnings estimates following its robust third-quarter results. The Zacks Consensus Estimate for 2013 remained intact at $2.91 per share in the last 60 days. The estimate for 2014, in particular, moved up 0.6% to $3.30 a share over the same period.
Moreover, the Most Accurate estimate for Primerica’s 2013 and 2014 earnings stands at $2.93 and $3.45 a share, resulting in an Earnings ESP of +0.7% and +4.6%, respectively. No downward revision in estimates was witnessed for both the years.
Other Stocks to Consider
Other top-ranked insurers in the industry include PartnerRe Ltd. (PRE), Kemper Corp. (KMPR) and Aspen Insurance Holdings Ltd. (AHL). All these stocks carry the same Zacks Rank as Primerica.
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