Source: Investing Published 11/15/2024, 00:57
Duluth, Georgia – Primerica, Inc. (NYSE: PRI), a leading financial services company in North America, announced a new share repurchase program approved by its Board of Directors. The company plans to repurchase up to $450 million of its own shares by December 31, 2025. This decision comes after reporting strong financial results for the third quarter.
The repurchase program allows for the acquisition of shares through various means, including open market transactions, block trades, and privately negotiated transactions, based on market conditions and other influencing factors. Primerica’s commitment to executing the repurchase is subject to regulatory guidelines and laws, specifically Rule 10b-18 of the Securities and Exchange Act of 1934.
Glenn Williams, CEO of Primerica, expressed satisfaction with the company’s revenue growth and free cash flow generation, which supports the board’s decision to initiate the share repurchase. However, the company clarified that the board reserves the right to terminate the program at any time and there is no obligation to repurchase any specific number of shares.
Primerica is known for providing financial products and services, including term life insurance and investment products, to middle-income families in North America. As of December 31, 2023, the company reported that it insures the lives of approximately 5.7 million people and manages approximately 2.9 million customer investment accounts. Primerica was the second-largest issuer of term life insurance in the United States and Canada in 2023.
The company’s shares are listed on the New York Stock Exchange and are a component of the S&P MidCap 400 and Russell 1000 stock indices.
The information in this article is based on a press release from Primerica, Inc.
In other recent news, Primerica, Inc. reported strong financial results for the third quarter of 2024, with a 21% year-over-year increase in adjusted net operating income to $193 million and a 28% increase in adjusted diluted operating earnings per share to $5.68. The company’s licensed life insurance sales force grew 7% and new term life insurance policies issued increased 5%. Additionally, Primerica returned $463 million to shareholders through share repurchases and dividends. The company also announced strategic initiatives, including a partnership with Canada Life and a focus on debt consolidation services.
Additionally, Primerica expects sales growth of 22% to 25% in its Investment and Savings Products segment for 2024. However, its Other Distributed Products and Corporate segment reported a pre-tax operating loss of $5.7 million, and operating expenses are expected to increase by 9% in the fourth quarter. Despite these challenges, Primerica continues to demonstrate resilience with strong growth in its sales force and policy issuance.
These are among the latest developments for Primerica, indicating a strategic focus on growth areas and a positive outlook despite rising operating costs and ongoing challenges in the consumer environment.
InvestingPro Insights
Primerica’s recent announcement of a $450 million share buyback program aligns well with its strong financial performance and shareholder-friendly policies. According to InvestingPro data, the company has shown impressive growth, with revenue up 12.27% over the past 12 months as of Q3 2024, to $3.14 billion. This strong revenue growth supports the company’s ability to fund its buyback program.
InvestingPro’s advice highlights Primerica’s commitment to shareholder returns, noting that the company has raised its dividend for 15 consecutive years. This record of dividend growth, coupled with the new share buyback program, underscores management’s confidence in the company’s financial strength and future prospects.
The company’s profitability metrics are also noteworthy, with a gross profit margin of 68.04% and an operating income margin of 31.58% for the past 12 months. These numbers indicate Primerica’s efficient operations and ability to generate significant cash flow, which are critical to sustaining both dividend payments and share buybacks.
Investors may find Primerica’s current valuation interesting, as the stock is trading near a 52-week high with a price-to-earnings ratio of 14.36 (adjusted for the past 12 months). This relatively modest price-to-earnings ratio, coupled with the company’s growth and shareholder return policies, could indicate potential value for investors.
For those interested in deeper analysis, InvestingPro offers 11 additional tips on Primerica, providing a more comprehensive look at the company’s financial health and market position.