PRIMERICA INC (PRI) Stock Fundamental Analysis
NYSE:PRI - New York Stock Exchange, Inc. - US74164M1080 - Common Stock - Currency: USD
PRI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 141 industry peers in the Insurance industry. PRI scores excellent on profitability, but there are concerns on its financial health. PRI has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
PRI had positive earnings in the past year.
In the past year PRI had a positive cash flow from operations.
In the past 5 years PRI has always been profitable.
Each year in the past 5 years PRI had a positive operating cash flow.
1.2 Ratios
PRI has a Return On Assets of 4.56%. This is amongst the best in the industry. PRI outperforms 82.98% of its industry peers.
PRI has a Return On Equity of 29.32%. This is amongst the best in the industry. PRI outperforms 95.74% of its industry peers.
With an excellent Return On Invested Capital value of 4.99%, PRI belongs to the best of the industry, outperforming 82.98% of the companies in the same industry.
PRI had an Average Return On Invested Capital over the past 3 years of 4.51%. This is in line with the industry average of 4.05%.
The last Return On Invested Capital (4.99%) for PRI is above the 3 year average (4.51%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.56% | ||
| ROE | 29.32% | ||
| ROIC | 4.99% |
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 has a Profit Margin of 21.41%. This is amongst the best in the industry. PRI outperforms 92.91% of its industry peers.
PRI's Profit Margin has declined in the last couple of years.
The Operating Margin of PRI (30.16%) is better than 95.74% of its industry peers.
In the last couple of years the Operating Margin of PRI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.16% | ||
| PM (TTM) | 21.41% | ||
| 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) below the Cost of Capital (WACC), PRI is destroying value.
Compared to 1 year ago, PRI has less shares outstanding
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 has a Debt to FCF ratio (2.29) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.80 indicates that PRI is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.80, PRI is not doing good in the industry: 86.52% of the companies in the same industry are doing better.
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 | 0.8 | ||
| Debt/FCF | 2.29 | ||
| Altman-Z | N/A |
ROIC/WACC0.67
WACC7.5%
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 23.56% over the past year.
Measured over the past years, PRI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.05% on average per year.
PRI shows a small growth in Revenue. In the last year, the Revenue has grown by 5.93%.
PRI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.51% yearly.
EPS 1Y (TTM)23.56%
EPS 3Y18.52%
EPS 5Y18.05%
EPS Q2Q%15.92%
Revenue 1Y (TTM)5.93%
Revenue growth 3Y4.46%
Revenue growth 5Y8.51%
Sales Q2Q%-1.25%
3.2 Future
Based on estimates for the next years, PRI will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.29% on average per year.
PRI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.54% yearly.
EPS Next Y9.33%
EPS Next 2Y8.97%
EPS Next 3Y9.18%
EPS Next 5Y9.29%
Revenue Next Year6.33%
Revenue Next 2Y5.63%
Revenue Next 3Y5.58%
Revenue Next 5Y5.54%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 12.35, the valuation of PRI can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of PRI is on the same level as its industry peers.
PRI is valuated cheaply when we compare the Price/Earnings ratio to 26.84, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 11.40, the valuation of PRI can be described as reasonable.
PRI's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of PRI to the average of the S&P500 Index (35.29), we can say PRI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.35 | ||
| Fwd PE | 11.4 |
4.2 Price Multiples
PRI's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PRI is cheaper than 62.41% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PRI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.63 | ||
| EV/EBITDA | 7.66 |
4.3 Compensation for Growth
PRI's 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)1.32
PEG (5Y)0.68
EPS Next 2Y8.97%
EPS Next 3Y9.18%
5. Dividend
5.1 Amount
PRI has a Yearly Dividend Yield of 1.58%.
Compared to an average industry Dividend Yield of 3.59, PRI has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.36, PRI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
5.2 History
On average, the dividend of PRI grows each year by 19.20%, which is quite nice.
PRI has paid a dividend for at least 10 years, which is a reliable track record.
PRI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)19.2%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
PRI pays out 19.17% of its income as dividend. This is a sustainable payout ratio.
PRI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP19.17%
EPS Next 2Y8.97%
EPS Next 3Y9.18%
261.67
-1.17 (-0.45%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners94.6%
Inst Owner Change-4.31%
Ins Owners0.55%
Ins Owner Change2.24%
Market Cap8.60B
Analysts71.43
Price Target313.43 (19.78%)
Short Float %3.54%
Short Ratio6.75
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.58% |
Yearly Dividend3.3
Dividend Growth(5Y)19.2%
DP19.17%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.86%
Min EPS beat(2)3.78%
Max EPS beat(2)3.94%
EPS beat(4)3
Avg EPS beat(4)6.31%
Min EPS beat(4)-0.09%
Max EPS beat(4)17.62%
EPS beat(8)5
Avg EPS beat(8)3.38%
EPS beat(12)8
Avg EPS beat(12)4.17%
EPS beat(16)8
Avg EPS beat(16)0.62%
Revenue beat(2)1
Avg Revenue beat(2)0.6%
Min Revenue beat(2)-0.26%
Max Revenue beat(2)1.46%
Revenue beat(4)2
Avg Revenue beat(4)0.4%
Min Revenue beat(4)-1.15%
Max Revenue beat(4)1.53%
Revenue beat(8)4
Avg Revenue beat(8)0.8%
Revenue beat(12)4
Avg Revenue beat(12)-0.17%
Revenue beat(16)7
Avg Revenue beat(16)5.58%
PT rev (1m)0.89%
PT rev (3m)3.12%
EPS NQ rev (1m)2.78%
EPS NQ rev (3m)0.64%
EPS NY rev (1m)0%
EPS NY rev (3m)0.29%
Revenue NQ rev (1m)1.83%
Revenue NQ rev (3m)1.48%
Revenue NY rev (1m)0.22%
Revenue NY rev (3m)0.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.35 | ||
| Fwd PE | 11.4 | ||
| P/S | 2.72 | ||
| P/FCF | 10.63 | ||
| P/OCF | 10.26 | ||
| P/B | 3.73 | ||
| P/tB | 3.8 | ||
| EV/EBITDA | 7.66 |
EPS(TTM)21.19
EY8.1%
EPS(NY)22.95
Fwd EY8.77%
FCF(TTM)24.62
FCFY9.41%
OCF(TTM)25.5
OCFY9.75%
SpS96.18
BVpS70.22
TBVpS68.84
PEG (NY)1.32
PEG (5Y)0.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.56% | ||
| ROE | 29.32% | ||
| ROCE | 6.52% | ||
| ROIC | 4.99% | ||
| ROICexc | 5.21% | ||
| ROICexgc | 6.51% | ||
| OM | 30.16% | ||
| PM (TTM) | 21.41% | ||
| GM | N/A | ||
| FCFM | 25.6% |
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-Score9
Asset Turnover0.21
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 2.29 | ||
| Debt/EBITDA | 1.44 | ||
| Cap/Depr | 8.75% | ||
| Cap/Sales | 0.91% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.31% | ||
| Profit Quality | 119.6% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score9
WACC7.5%
ROIC/WACC0.67
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)23.56%
EPS 3Y18.52%
EPS 5Y18.05%
EPS Q2Q%15.92%
EPS Next Y9.33%
EPS Next 2Y8.97%
EPS Next 3Y9.18%
EPS Next 5Y9.29%
Revenue 1Y (TTM)5.93%
Revenue growth 3Y4.46%
Revenue growth 5Y8.51%
Sales Q2Q%-1.25%
Revenue Next Year6.33%
Revenue Next 2Y5.63%
Revenue Next 3Y5.58%
Revenue Next 5Y5.54%
EBIT growth 1Y-28.26%
EBIT growth 3Y8.3%
EBIT growth 5Y13.71%
EBIT Next Year-9.11%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y22%
FCF growth 3Y9.62%
FCF growth 5Y11.4%
OCF growth 1Y22.35%
OCF growth 3Y9.48%
OCF growth 5Y12.17%