PRIMERICA INC (PRI) Stock Fundamental Analysis
NYSE:PRI - New York Stock Exchange, Inc. - US74164M1080 - Common Stock - Currency: USD
Taking everything into account, PRI scores 4 out of 10 in our fundamental rating. PRI was compared to 143 industry peers in the Insurance industry. PRI has an excellent profitability rating, but there are concerns on its financial health. PRI is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
PRI had positive earnings in the past year.
PRI had a positive operating cash flow in the past year.
PRI had positive earnings in 4 of the past 5 years.
PRI had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
PRI has a better Return On Assets (3.99%) than 72.34% of its industry peers.
The Return On Equity of PRI (30.36%) is better than 92.91% of its industry peers.
PRI has a better Return On Invested Capital (7.17%) than 87.23% of its industry peers.
The Average Return On Invested Capital over the past 3 years for PRI is in line with the industry average of 4.59%.
The last Return On Invested Capital (7.17%) for PRI is above the 3 year average (3.77%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.99% | ||
| ROE | 30.36% | ||
| ROIC | 7.17% |
ROA(3y)3.33%
ROA(5y)3.04%
ROE(3y)24.58%
ROE(5y)23.35%
ROIC(3y)3.77%
ROIC(5y)3.39%
1.3 Margins
The Profit Margin of PRI (19.40%) is better than 83.69% of its industry peers.
PRI's Profit Margin has improved in the last couple of years.
PRI has a Operating Margin of 45.42%. This is amongst the best in the industry. PRI outperforms 97.16% of its industry peers.
In the last couple of years the Operating Margin of PRI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.42% | ||
| PM (TTM) | 19.4% | ||
| GM | N/A |
OM growth 3Y4.39%
OM growth 5Y3.36%
PM growth 3Y5.62%
PM growth 5Y3.75%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PRI is destroying value.
There is no outstanding debt for PRI. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
The Debt to FCF ratio of PRI is 2.45, which is a good value as it means it would take PRI, 2.45 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.45, PRI is in line with its industry, outperforming 50.35% of the companies in the same industry.
A Debt/Equity ratio of 0.99 indicates that PRI is somewhat dependend on debt financing.
PRI's Debt to Equity ratio of 0.99 is on the low side compared to the rest of the industry. PRI is outperformed by 86.52% of its industry peers.
Although PRI does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 2.45 | ||
| Altman-Z | N/A |
ROIC/WACC0.94
WACC7.61%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
PRI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.74%, which is quite impressive.
PRI shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.05% yearly.
EPS 1Y (TTM)20.74%
EPS 3Y18.52%
EPS 5Y18.05%
EPS Q2Q%18.35%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%8.81%
3.2 Future
The Earnings Per Share is expected to grow by 9.38% on average over the next years. This is quite good.
Based on estimates for the next years, PRI will show a small growth in Revenue. The Revenue will grow by 4.90% on average per year.
EPS Next Y9.35%
EPS Next 2Y9.59%
EPS Next 3Y9.38%
EPS Next 5YN/A
Revenue Next Year5.51%
Revenue Next 2Y5.19%
Revenue Next 3Y4.9%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 14.14 indicates a correct valuation of PRI.
PRI's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.63, PRI is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 12.93, the valuation of PRI can be described as correct.
PRI's Price/Forward Earnings ratio is in line with the industry average.
PRI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.14 | ||
| Fwd PE | 12.93 |
4.2 Price Multiples
76.60% of the companies in the same industry are more expensive than PRI, based on the Enterprise Value to EBITDA ratio.
PRI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.62 | ||
| EV/EBITDA | 6.3 |
4.3 Compensation for Growth
PRI's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PRI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.51
PEG (5Y)0.78
EPS Next 2Y9.59%
EPS Next 3Y9.38%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.49%, PRI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.09, PRI has a dividend in line with its industry peers.
PRI's Dividend Yield is slightly below the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
5.2 History
The dividend of PRI is nicely growing with an annual growth rate of 20.82%!
PRI has been paying a dividend for at least 10 years, so it has a reliable track record.
PRI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)20.82%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
PRI pays out 17.85% of its income as dividend. This is a sustainable payout ratio.
The dividend of PRI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP17.85%
EPS Next 2Y9.59%
EPS Next 3Y9.38%
273.4
-6.52 (-2.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners92.5%
Inst Owner Change-1.47%
Ins Owners0.52%
Ins Owner Change-3.85%
Market Cap9.13B
Analysts70
Price Target322.76 (18.05%)
Short Float %1.32%
Short Ratio2.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.49% |
Yearly Dividend2.61
Dividend Growth(5Y)20.82%
DP17.85%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.92%
Min EPS beat(2)4.22%
Max EPS beat(2)17.62%
EPS beat(4)2
Avg EPS beat(4)3.57%
Min EPS beat(4)-6.06%
Max EPS beat(4)17.62%
EPS beat(8)5
Avg EPS beat(8)5.07%
EPS beat(12)6
Avg EPS beat(12)0.28%
EPS beat(16)8
Avg EPS beat(16)0.71%
Revenue beat(2)1
Avg Revenue beat(2)2.53%
Min Revenue beat(2)-1.15%
Max Revenue beat(2)6.21%
Revenue beat(4)1
Avg Revenue beat(4)0.83%
Min Revenue beat(4)-1.15%
Max Revenue beat(4)6.21%
Revenue beat(8)2
Avg Revenue beat(8)-0.42%
Revenue beat(12)4
Avg Revenue beat(12)7.1%
Revenue beat(16)8
Avg Revenue beat(16)5.98%
PT rev (1m)-0.05%
PT rev (3m)8.25%
EPS NQ rev (1m)1.43%
EPS NQ rev (3m)4.16%
EPS NY rev (1m)-0.13%
EPS NY rev (3m)5.82%
Revenue NQ rev (1m)0.79%
Revenue NQ rev (3m)-24.86%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)-27.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.14 | ||
| Fwd PE | 12.93 | ||
| P/S | 3 | ||
| P/FCF | 11.62 | ||
| P/OCF | 10.97 | ||
| P/B | 4.69 | ||
| P/tB | 4.8 | ||
| EV/EBITDA | 6.3 |
EPS(TTM)19.33
EY7.07%
EPS(NY)21.14
Fwd EY7.73%
FCF(TTM)23.52
FCFY8.6%
OCF(TTM)24.93
OCFY9.12%
SpS91.22
BVpS58.29
TBVpS56.93
PEG (NY)1.51
PEG (5Y)0.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.99% | ||
| ROE | 30.36% | ||
| ROCE | 9.43% | ||
| ROIC | 7.17% | ||
| ROICexc | 7.45% | ||
| ROICexgc | 9.35% | ||
| OM | 45.42% | ||
| PM (TTM) | 19.4% | ||
| GM | N/A | ||
| FCFM | 25.79% |
ROA(3y)3.33%
ROA(5y)3.04%
ROE(3y)24.58%
ROE(5y)23.35%
ROIC(3y)3.77%
ROIC(5y)3.39%
ROICexc(3y)3.9%
ROICexc(5y)3.5%
ROICexgc(3y)5%
ROICexgc(5y)4.48%
ROCE(3y)4.96%
ROCE(5y)4.45%
ROICexcg growth 3Y12.72%
ROICexcg growth 5Y8.71%
ROICexc growth 3Y12.91%
ROICexc growth 5Y8.54%
OM growth 3Y4.39%
OM growth 5Y3.36%
PM growth 3Y5.62%
PM growth 5Y3.75%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.21
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 2.45 | ||
| Debt/EBITDA | 1.13 | ||
| Cap/Depr | 14.76% | ||
| Cap/Sales | 1.54% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 48.93% | ||
| Profit Quality | 132.92% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score7
WACC7.61%
ROIC/WACC0.94
Cap/Depr(3y)8.8%
Cap/Depr(5y)N/A
Cap/Sales(3y)1.02%
Cap/Sales(5y)N/A
Profit Quality(3y)134.48%
Profit Quality(5y)139.35%
High Growth Momentum
Growth
EPS 1Y (TTM)20.74%
EPS 3Y18.52%
EPS 5Y18.05%
EPS Q2Q%18.35%
EPS Next Y9.35%
EPS Next 2Y9.59%
EPS Next 3Y9.38%
EPS Next 5YN/A
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%8.81%
Revenue Next Year5.51%
Revenue Next 2Y5.19%
Revenue Next 3Y4.9%
Revenue Next 5YN/A
EBIT growth 1Y84.75%
EBIT growth 3Y12.96%
EBIT growth 5Y11.82%
EBIT Next Year9.03%
EBIT Next 3Y6.97%
EBIT Next 5YN/A
FCF growth 1Y5.32%
FCF growth 3Y2.27%
FCF growth 5Y6.62%
OCF growth 1Y7.68%
OCF growth 3Y2.48%
OCF growth 5Y7.69%