PRIMERICA INC (PRI) Stock Fundamental Analysis
NYSE:PRI - New York Stock Exchange, Inc. - US74164M1080 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to PRI. PRI was compared to 143 industry peers in the Insurance industry. PRI scores excellent on profitability, but there are concerns on its financial health. PRI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year PRI was profitable.
In the past year PRI had a positive cash flow from operations.
Each year in the past 5 years PRI has been profitable.
PRI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of PRI (4.37%) is better than 84.62% of its industry peers.
PRI's Return On Equity of 28.24% is amongst the best of the industry. PRI outperforms 95.80% of its industry peers.
The Return On Invested Capital of PRI (7.74%) is better than 89.51% 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 4.06%.
The last Return On Invested Capital (7.74%) for PRI is above the 3 year average (4.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 28.24% | ||
| ROIC | 7.74% |
ROA(3y)3.41%
ROA(5y)3.15%
ROE(3y)23.89%
ROE(5y)23.09%
ROIC(3y)4.51%
ROIC(5y)3.99%
1.3 Margins
PRI's Profit Margin of 20.10% is amongst the best of the industry. PRI outperforms 90.21% of its industry peers.
In the last couple of years the Profit Margin of PRI has declined.
Looking at the Operating Margin, with a value of 45.61%, PRI belongs to the top of the industry, outperforming 99.30% of the companies in the same industry.
PRI's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 45.61% | ||
| PM (TTM) | 20.1% | ||
| GM | N/A |
OM growth 3Y3.67%
OM growth 5Y4.8%
PM growth 3Y-4.72%
PM growth 5Y-3.09%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), PRI is creating some value.
The number of shares outstanding for PRI has been reduced compared to 1 year ago.
PRI has less shares outstanding than it did 5 years ago.
PRI has a better debt/assets ratio than last year.
2.2 Solvency
PRI has a debt to FCF ratio of 2.29. This is a good value and a sign of high solvency as PRI would need 2.29 years to pay back of all of its debts.
PRI's Debt to FCF ratio of 2.29 is in line compared to the rest of the industry. PRI outperforms 47.55% of its industry peers.
A Debt/Equity ratio of 0.83 indicates that PRI is somewhat dependend on debt financing.
PRI has a Debt to Equity ratio of 0.83. This is amonst the worse of the industry: PRI underperforms 86.01% 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 | 0.83 | ||
| Debt/FCF | 2.29 | ||
| Altman-Z | N/A |
ROIC/WACC1.02
WACC7.57%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 24.41% over the past year.
The Earnings Per Share has been growing by 18.05% on average over the past years. This is quite good.
Looking at the last year, PRI shows a quite strong growth in Revenue. The Revenue has grown by 10.53% in the last year.
Measured over the past years, PRI shows a quite strong growth in Revenue. The Revenue has been growing by 8.51% on average per year.
EPS 1Y (TTM)24.41%
EPS 3Y18.52%
EPS 5Y18.05%
EPS Q2Q%28.39%
Revenue 1Y (TTM)10.53%
Revenue growth 3Y4.46%
Revenue growth 5Y8.51%
Sales Q2Q%8.52%
3.2 Future
The Earnings Per Share is expected to grow by 9.49% on average over the next years. This is quite good.
PRI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.19% yearly.
EPS Next Y9.33%
EPS Next 2Y8.97%
EPS Next 3Y9.18%
EPS Next 5Y9.49%
Revenue Next Year6.1%
Revenue Next 2Y5.32%
Revenue Next 3Y5.16%
Revenue Next 5Y5.19%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue 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 12.96 indicates a correct valuation of PRI.
PRI's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.93, PRI is valued rather cheaply.
PRI is valuated reasonably with a Price/Forward Earnings ratio of 11.54.
PRI's Price/Forward Earnings ratio is in line with the industry average.
PRI is valuated cheaply when we compare the Price/Forward Earnings ratio to 37.78, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 11.54 |
4.2 Price Multiples
PRI's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PRI is cheaper than 76.22% of the companies in the same industry.
PRI's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.62 | ||
| EV/EBITDA | 5.64 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of PRI may justify a higher PE ratio.
PEG (NY)1.39
PEG (5Y)0.72
EPS Next 2Y8.97%
EPS Next 3Y9.18%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.55%, PRI has a reasonable but not impressive dividend return.
PRI's Dividend Yield is comparable with the industry average which is at 3.29.
PRI's Dividend Yield is slightly below the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
5.2 History
On average, the dividend of PRI grows each year by 19.20%, which is quite nice.
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)19.2%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
19.03% of the earnings are spent on dividend by PRI. This is a low number and sustainable payout ratio.
PRI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP19.03%
EPS Next 2Y8.97%
EPS Next 3Y9.18%
264.83
-0.89 (-0.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners94.29%
Inst Owner Change-1.34%
Ins Owners0.56%
Ins Owner Change2.42%
Market Cap8.70B
Analysts69.23
Price Target312.7 (18.08%)
Short Float %3.93%
Short Ratio7.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
Yearly Dividend3.3
Dividend Growth(5Y)19.2%
DP19.03%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.93%
Min EPS beat(2)-0.09%
Max EPS beat(2)3.94%
EPS beat(4)3
Avg EPS beat(4)6.42%
Min EPS beat(4)-0.09%
Max EPS beat(4)17.62%
EPS beat(8)5
Avg EPS beat(8)3.37%
EPS beat(12)7
Avg EPS beat(12)3.35%
EPS beat(16)8
Avg EPS beat(16)1.03%
Revenue beat(2)2
Avg Revenue beat(2)1.5%
Min Revenue beat(2)1.46%
Max Revenue beat(2)1.53%
Revenue beat(4)3
Avg Revenue beat(4)2.01%
Min Revenue beat(4)-1.15%
Max Revenue beat(4)6.21%
Revenue beat(8)4
Avg Revenue beat(8)0.42%
Revenue beat(12)5
Avg Revenue beat(12)7.83%
Revenue beat(16)8
Avg Revenue beat(16)5.95%
PT rev (1m)0.66%
PT rev (3m)2.88%
EPS NQ rev (1m)0.36%
EPS NQ rev (3m)-0.5%
EPS NY rev (1m)0.24%
EPS NY rev (3m)0.58%
Revenue NQ rev (1m)-0.49%
Revenue NQ rev (3m)-0.61%
Revenue NY rev (1m)0.19%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.96 | ||
| Fwd PE | 11.54 | ||
| P/S | 2.74 | ||
| P/FCF | 10.62 | ||
| P/OCF | 10.25 | ||
| P/B | 3.86 | ||
| P/tB | 3.94 | ||
| EV/EBITDA | 5.64 |
EPS(TTM)20.44
EY7.72%
EPS(NY)22.95
Fwd EY8.67%
FCF(TTM)24.93
FCFY9.41%
OCF(TTM)25.83
OCFY9.75%
SpS96.48
BVpS68.67
TBVpS67.29
PEG (NY)1.39
PEG (5Y)0.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.37% | ||
| ROE | 28.24% | ||
| ROCE | 10.1% | ||
| ROIC | 7.74% | ||
| ROICexc | 8.09% | ||
| ROICexgc | 9.99% | ||
| OM | 45.61% | ||
| PM (TTM) | 20.1% | ||
| GM | N/A | ||
| FCFM | 25.84% |
ROA(3y)3.41%
ROA(5y)3.15%
ROE(3y)23.89%
ROE(5y)23.09%
ROIC(3y)4.51%
ROIC(5y)3.99%
ROICexc(3y)4.7%
ROICexc(5y)4.15%
ROICexgc(3y)5.93%
ROICexgc(5y)5.27%
ROCE(3y)5.88%
ROCE(5y)5.21%
ROICexcg growth 3Y11.32%
ROICexcg growth 5Y12.44%
ROICexc growth 3Y13.03%
ROICexc growth 5Y13.1%
OM growth 3Y3.67%
OM growth 5Y4.8%
PM growth 3Y-4.72%
PM growth 5Y-3.09%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 2.29 | ||
| Debt/EBITDA | 1.06 | ||
| Cap/Depr | 9.08% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 47.9% | ||
| Profit Quality | 128.54% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC7.57%
ROIC/WACC1.02
Cap/Depr(3y)8.9%
Cap/Depr(5y)9.38%
Cap/Sales(3y)1.03%
Cap/Sales(5y)1.05%
Profit Quality(3y)149.37%
Profit Quality(5y)148.26%
High Growth Momentum
Growth
EPS 1Y (TTM)24.41%
EPS 3Y18.52%
EPS 5Y18.05%
EPS Q2Q%28.39%
EPS Next Y9.33%
EPS Next 2Y8.97%
EPS Next 3Y9.18%
EPS Next 5Y9.49%
Revenue 1Y (TTM)10.53%
Revenue growth 3Y4.46%
Revenue growth 5Y8.51%
Sales Q2Q%8.52%
Revenue Next Year6.1%
Revenue Next 2Y5.32%
Revenue Next 3Y5.16%
Revenue Next 5Y5.19%
EBIT growth 1Y82.89%
EBIT growth 3Y8.3%
EBIT growth 5Y13.71%
EBIT Next Year-9.11%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y18.14%
FCF growth 3Y9.62%
FCF growth 5Y11.4%
OCF growth 1Y17.98%
OCF growth 3Y9.48%
OCF growth 5Y12.17%