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Primerica (PRI) Boosts Shareholder Value, Okays Share Buyback

The board of directors of Primerica, Inc. PRI recently authorized a share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $275 million to repurchase its common stock through next year.

The latest approval replaces the $300 million authorization, which the board had approved in February 2021. As there were no buybacks made in the third quarter of 2021, Primerica had full authorization available as of Sep 30, 2021. This Zacks Rank #2 (Buy) insurer expects to resume buyback this year itself.

Primerica boasts being 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. This, in turn, should continue to boost operational performance.

CEO Glenn Williams stated, "We remain committed to driving value by growing our business, serving our clients, and generating capital to return to our stockholders. This $275 million repurchase authority is evidence of our commitment." Total stockholder return has continually outperformed the S&P 500 Index over the last five years. Primerica has also raised dividends 10 times in the last nine years.

Shares of Primerica have gained 20.1% year to date outperforming the industry’s increase of 8%. A compelling portfolio, strong market presence, and sturdy financial position continue to drive Primerica.

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Given the solid capital level of the insurance industry and an improving operating backdrop favoring strong operational performance, insurers like Lincoln National Corporation LNC, Aflac AFL and RLI Corp. RLI have resorted to effective capital deployment to enhance shareholders’ value.

Aflac’s board of directors recently approved a 21.2% dividend hike. Aflac’s regular share buybacks and dividends hikes highlight its sound liquidity position.

Lincoln National’s board approved a $1.5 billion share buyback program. A robust financial position driven by a sound balance sheet and strong cash generation capabilities over the years has aided Lincoln National to engage in accelerated and prudent capital deployment measures.

RLI has been paying special dividends since 2011 and increasing its dividend for the past 46 years, which has grown at an average of 5.2% in the past 10 years. RLI’s diversified product portfolio, a strong local branch-office network, a focus on specialty insurance lines growth and financial strength should continue to help boost shareholders’ returns.

Shares of Lincoln National, Aflac and RLI Corp have risen 41.9%, 25.7% and 7% year to date.

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


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