Primerica Hits 52-Week-High on Strong Q2 Operating Results

On Aug 27, 2014, shares of Primerica, Inc. PRI scaled a 52-week high of $50.81 on a second-quarter earnings beat. With about 0.1 million shares exchanging hands in the last trading session, shares closed at $50.76, gaining 1.4%.

The year-to-date return from the stock came in at 18.3%, which was ahead of the S&P return of 8.2%.

With respect to earnings performance, this life insurer delivered positive surprises in three of the last four quarters with an average beat of 2.6%. In second-quarter 2014, Primerica recorded a net operating income of 88 cents per share that was higher than the Zacks Consensus Estimate by 6% and year-ago quarter figure by 25%. The performance was primarily attributable to improvement in Term Life premiums as well as Investment and Savings Products.
    
Primerica reported total revenue of $331 million, which marginally came ahead of the Zacks Consensus Estimate. It also improved year over year by 9.1% driven by increase in net premiums as well as commissions and fees.

The quarter witnessed lower expenses due to the settlement of the Florida Retirement System FRS in first-quarter 2014.

As part of Primerica's efforts to improve shareholders' value, Primerica completed reserve financing transaction on Jul 31, 2014. The move will enable the company to deploy capital worth $150 million annually through 2016. Additionally, in the reported quarter, the company repurchased 0.5 shares worth $21.9 million taking the year to date tally to 0.8 million shares bought back for a total of $35 million.

On the strength of its solid operational performance, Primerica generated return on equity was 15.4% in the second quarter, improving from 14.2% in the year ago quarter.

This Zacks Rank #3 (Hold) stock has been witnessing upward revisions in the Zacks Consensus Estimate in the last 30 days. For 2014, the Zacks Consensus Estimate moved north by 1.2% to $3.35 per share as 3 of 4 estimates moved up, while for 2015, it rose 1.6% to $3.74 as 1 of 4 estimates moved north.

Last week, another life insurer Voya Financial, Inc. VOYA reported a 52 week-high of $38.88 on solid second-quarter 2014 performance.

Stocks to Consider

Investors interested in life insurance companies could consider stocks like Fidelity & Guaranty Life Common FGL and Health Insurance Innovations, Inc. HIIQ. While Fidelity & Guaranty Life Common sports a Zacks Rank #1 (Strong Buy), Health Insurance Innovations has a Zacks Rank #2 (Buy).