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Primerica (PRI) OKs Share Buyback to Boost Shareholder Return

The board of directors of Primerica, Inc. PRI authorized a share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $375 million to repurchase its common stock through next year.

Primerica had $31.9 million available for repurchase as of Sep 30, 2022. Under the last authorization, the insurer bought back 2.6 million shares for $343.1 million through the first nine months of 2022.

Primerica is the second-largest issuer of term life insurance coverage in North America, with solid demand for protection products driving sales growth and policy persistency. Riding on the strength of its business model, Primerica is well-poised to cater to the middle market's increased demand for financial security.

Management stated that its term-life face amount in force exceeds $912 billion, while client asset values were almost $80 billion as of Sep30, 2022. This, in turn, should continue to drive the company’s operational results.

Banking on operational excellence, total stockholder returns continually outperformed the S&P 500 Index over the last five years. Primerica boasts a stockholder return of 200% over the last five years, outperforming the S&P 500 Insurance Index’s 56%.

Shares of Primerica have lost 6.6% year to date, compared with the industry’s decline of 13.8%. A compelling portfolio, strong market presence and sturdy financial position continue to drive Primerica. PRI currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Zacks Investment Research
Zacks Investment Research


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Given a solid capital level in the insurance industry and an improving operating backdrop favoring strong operational performance, insurers like Assurant Inc. AIZ, American Financial Group’s AFG and RLI Corporation RLI have resorted to effective capital deployment to enhance shareholders’ value.

In November 2022, Assurant’s board approved a 2.9% hike in its quarterly dividend. The recent hike marked the 18th consecutive dividend increase by Assurant since its initial public offering in 2004. Effective capital deployment highlights AIZ’s commitment toward prudent capital management, reflecting its sustained operational performance and its sound financial prospects.

American Financial Group declared a special cash dividend of $2 per share, the aggregate of which will be nearly $170 million. American Financial Group’s 1.7% dividend yield betters the industry average of 0.4%, making the stock attractive for yield-seeking investors. AFG’s robust operating profitability in the property and casualty segment, and effective capital management support shareholder returns.

In November 2022, the board of directors of RLI approved a special cash dividend of $7.00 per share, marking the 13th straight special dividend. RLI’s diversified product portfolio, a strong local branch-office network, a focus on specialty insurance line growth via organic opportunities and acquisitions, and financial strength should continue to help boost shareholders’ returns. RLI has witnessed shareholders’ returns of 16.2% in the past 20 years, outperforming the S&P 500 and the S&P P&C Index.

Shares of American Financial Group and RLI Corp have gained 3.5% and 16.2% year to date while the same for Assurant lost 19.8% over the same time frame.


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