StanCorp Financial Group Inc. SFG is set to report first-quarter 2015 earnings results on Apr 23, 2015. Last quarter, it posted a positive earnings surprise of 5.19%. Let us see how things are shaping up for this announcement.
Factors Affecting the Past Quarter
Conservative underwriting practices and a strong capital position bode well for the company’s growth. An expected growth in Employee Benefits sales and efficient capital deployment initiatives should boost earnings this quarter. Moreover, the Asset Management segment is expected to contribute positively to the top line and hence the earnings.
However, a low interest rate environment and high claims incidence are likely to weigh on the results to some extent.
Earnings Whispers
Our proven model does not conclusively show that StanCorp Financial is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: StanCorp Financial has an ESP of -1.75%. This is because the Most Accurate estimate stands at $1.12 per share while the Zacks Consensus Estimate is pegged at $1.14 per share.
Zacks Rank: StanCorp Financial has a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, a negative ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks in the insurance space you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Manulife Financial Corporation MFC has an Earnings ESP of +2.94% and a Zacks Rank #3.
Assurant Inc. AIZ has an Earnings ESP of +2.70% and a Zacks Rank #3.
MetLife, Inc. MET has an Earnings ESP of +1.42% and a Zacks Rank #3.
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