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Here's Why You Should Stay Invested in Primerica (PRI) Stock
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Primerica (PRI - Free Report) is well-poised to grow, banking on the strength of a compelling portfolio, strong market presence and a solid capital position. These, coupled with optimistic growth projections, make the stock worth retaining in one’s portfolio.
Shares of this Zacks Rank #3 (Hold) company have gained 10.6% compared with the industry’s increase of 10.7%.
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 5 cents and 7 cents north, respectively, in the past 30 days, reflecting analysts’ optimism.
Optimistic Growth Projection
The Zacks Consensus Estimate for Primerica’s 2024 earnings is pegged at $17.66 per share, indicating an increase of 9.9% on 6.7% higher revenues of $3 billion. The Zacks Consensus Estimate for Primerica’s 2025 earnings is pegged at $19.64 per share, indicating an increase of 11.2% on 5.3% higher revenues of $3.2 billion. It has a Growth Score of B.
Primerica envisions being a successful senior health business while continuing to enhance its shareholders’ value.
Return on Capital
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders’ funds, has been improving over the last several years. PRI’s trailing 12-month ROE of 27.4% is better than the industry average of 15.5%.
Also, the return on invested capital in the trailing 12 months was 7%, better than the industry average of 0.7%, reflecting PRI’s efficiency in utilizing funds to generate income.
Growth Drivers
PRI noted that 48% of middle-income Americans will not be ready for retirement based on their investment and savings habits. Thus, life-licensed sales representatives play a major role in capitalizing on growth opportunities. Management estimates more than a 3% rise in sales force size in 2024. Primerica is the second-largest issuer of term-life insurance coverage in North America.
Licensed representatives, as well as growing distribution capabilities, act as catalysts, contributing to operational results for the insurer. The insurer estimates a 3-5% rise in the number of Term Life policies and a high single-digit growth in Investment and Savings Products sales.
Solid demand for protection products should help the insurer retain sales growth and policy persistency. A strong business model makes it well-poised to cater to the middle market's increased demand for financial security.
Life insurers are direct beneficiaries of an improving interest rate environment. An improved interest rate environment should aid net investment income.
Primerica has been strengthening its balance sheet by improving its leverage ratio while maintaining solid liquidity. It scores strongly with credit rating agencies.
The strength of its Term-life insurance business ensures consistent free cash flow. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Wealth Distribution
Banking on this strength, the insurer raises dividends each year apart from buying back shares. Dividends increased at a 10-year CAGR of 20%. It also has $315.9 million worth of shares remaining under authorization.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Reinsurance Group of America (RGA - Free Report) , Old Republic International (ORI - Free Report) and Radian Group (RDN - Free Report) .
Reinsurance Group delivered a four-quarter average earnings surprise of 19.48%. The stock has gained 29.4% year to date. The Zacks Consensus Estimate for RGA’s 2024 and 2025 earnings implies a 3.9% and 4.3% year-over-year increase, respectively. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Old Republic delivered a four-quarter average earnings surprise of 6.61%. The stock has gained 7.2% year to date. The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings suggests growth of 3.8% and 4.8%, respectively, from a year ago. It carries a Zacks Rank #2 (Buy).
Radian delivered a four-quarter average earnings surprise of 22.79%. The stock has gained 9.7% year to date. The Zacks Consensus Estimate for RDN’s 2024 earnings has moved 7.6% north in the past 30 days. It carries a Zacks Rank #2.
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Here's Why You Should Stay Invested in Primerica (PRI) Stock
Primerica (PRI - Free Report) is well-poised to grow, banking on the strength of a compelling portfolio, strong market presence and a solid capital position. These, coupled with optimistic growth projections, make the stock worth retaining in one’s portfolio.
Shares of this Zacks Rank #3 (Hold) company have gained 10.6% compared with the industry’s increase of 10.7%.
It has a VGM Score of B.
Image Source: Zacks Investment Research
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 5 cents and 7 cents north, respectively, in the past 30 days, reflecting analysts’ optimism.
Optimistic Growth Projection
The Zacks Consensus Estimate for Primerica’s 2024 earnings is pegged at $17.66 per share, indicating an increase of 9.9% on 6.7% higher revenues of $3 billion. The Zacks Consensus Estimate for Primerica’s 2025 earnings is pegged at $19.64 per share, indicating an increase of 11.2% on 5.3% higher revenues of $3.2 billion. It has a Growth Score of B.
Primerica envisions being a successful senior health business while continuing to enhance its shareholders’ value.
Return on Capital
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders’ funds, has been improving over the last several years. PRI’s trailing 12-month ROE of 27.4% is better than the industry average of 15.5%.
Also, the return on invested capital in the trailing 12 months was 7%, better than the industry average of 0.7%, reflecting PRI’s efficiency in utilizing funds to generate income.
Growth Drivers
PRI noted that 48% of middle-income Americans will not be ready for retirement based on their investment and savings habits. Thus, life-licensed sales representatives play a major role in capitalizing on growth opportunities. Management estimates more than a 3% rise in sales force size in 2024. Primerica is the second-largest issuer of term-life insurance coverage in North America.
Licensed representatives, as well as growing distribution capabilities, act as catalysts, contributing to operational results for the insurer. The insurer estimates a 3-5% rise in the number of Term Life policies and a high single-digit growth in Investment and Savings Products sales.
Solid demand for protection products should help the insurer retain sales growth and policy persistency. A strong business model makes it well-poised to cater to the middle market's increased demand for financial security.
Life insurers are direct beneficiaries of an improving interest rate environment. An improved interest rate environment should aid net investment income.
Primerica has been strengthening its balance sheet by improving its leverage ratio while maintaining solid liquidity. It scores strongly with credit rating agencies.
The strength of its Term-life insurance business ensures consistent free cash flow. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Wealth Distribution
Banking on this strength, the insurer raises dividends each year apart from buying back shares. Dividends increased at a 10-year CAGR of 20%. It also has $315.9 million worth of shares remaining under authorization.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Reinsurance Group of America (RGA - Free Report) , Old Republic International (ORI - Free Report) and Radian Group (RDN - Free Report) .
Reinsurance Group delivered a four-quarter average earnings surprise of 19.48%. The stock has gained 29.4% year to date. The Zacks Consensus Estimate for RGA’s 2024 and 2025 earnings implies a 3.9% and 4.3% year-over-year increase, respectively. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Old Republic delivered a four-quarter average earnings surprise of 6.61%. The stock has gained 7.2% year to date. The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings suggests growth of 3.8% and 4.8%, respectively, from a year ago. It carries a Zacks Rank #2 (Buy).
Radian delivered a four-quarter average earnings surprise of 22.79%. The stock has gained 9.7% year to date. The Zacks Consensus Estimate for RDN’s 2024 earnings has moved 7.6% north in the past 30 days. It carries a Zacks Rank #2.