Analyzing Primerica (PRI) and Its Competitors

Primerica (NYSE: PRI) is one of 38 public companies in the “Life insurance” industry, but how does it contrast to its peers? We will compare Primerica to similar businesses based on the strength of its dividends, risk, valuation, institutional ownership, earnings, profitability and analyst recommendations.

Risk & Volatility

Primerica has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Primerica’s peers have a beta of 1.06, meaning that their average share price is 6% more volatile than the S&P 500.

Institutional and Insider Ownership

91.4% of Primerica shares are held by institutional investors. Comparatively, 51.0% of shares of all “Life insurance” companies are held by institutional investors. 0.9% of Primerica shares are held by company insiders. Comparatively, 17.9% of shares of all “Life insurance” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Primerica and its peers revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Primerica $1.69 billion $350.25 million 17.64
Primerica Competitors $22.05 billion $1.25 billion 16.26

Primerica’s peers have higher revenue and earnings than Primerica. Primerica is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings and price targets for Primerica and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Primerica 0 3 0 0 2.00
Primerica Competitors 318 1129 1519 83 2.45

Primerica currently has a consensus price target of $103.00, suggesting a potential upside of 5.75%. As a group, “Life insurance” companies have a potential upside of 7.02%. Given Primerica’s peers stronger consensus rating and higher possible upside, analysts clearly believe Primerica has less favorable growth aspects than its peers.

Profitability

This table compares Primerica and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Primerica 20.74% 19.47% 2.10%
Primerica Competitors 4.46% 4.86% 0.81%

Dividends

Primerica pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Primerica pays out 18.1% of its earnings in the form of a dividend. As a group, “Life insurance” companies pay a dividend yield of 2.1% and pay out 28.7% of their earnings in the form of a dividend. Primerica has increased its dividend for 7 consecutive years.

Summary

Primerica peers beat Primerica on 8 of the 15 factors compared.

About Primerica

Primerica, Inc., together with its subsidiaries, distributes financial products to middle income households in the United States and Canada. The company operates in three segments: Term Life Insurance; Investment and Savings Products; and Corporate and Other Distributed Products. It underwrites individual term life insurance products. The company also distributes and sells mutual funds and various retirement plans, managed investments, variable and fixed annuities, fixed indexed annuities, and segregated funds. In addition, it offers auto and homeowners' insurance, long-term care insurance, home automation solutions, and mortgage loan referrals; and insurance products, including supplemental medical and dental, accidental death, and disability for small businesses. Further, the company provides prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters. The company distributes and sells its products through licensed sales representatives. Primerica, Inc. was founded in 1927 and is based in Duluth, Georgia.

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