Primerica Rewards Shareholders With 5.9% Hike In Dividend

Primerica, Inc. (NYSE:PRI) announced that its board of directors recently approved a 5.9% hike in its quarterly dividend. The insurer will now pay 18 cents per share as against 17 cents paid on Jun 16, 2016.

Shareholders on record as of Aug 24 will have the meatier dividend in their pockets on Sep 16, 2016. Based on yesterday's closing price of $81.99, the annualized dividend of 72 cents per share will have a yield 1.3%, almost in line with the industry average.

Based on the weighted average outstanding shares of 47.7 million as of Jun 30, 2016 the company is likely to pay an annual dividend of $34.3 million and quarterly dividend of $8.5 million in 2016. The trailing twelve months’ dividend payout ratio is 12.1% against the industry average of 10.75%.

Primerica has an impressive solid track of enhancing shareholders’ worth by increasing dividends each year. The same makes it an attractive pick for yield seeking investors. In fact, the company’s dividend payout has grown at CAGR of 43% over the last five years. Notably, the latest hike marks the second increase in this year. This February, the board approved a 6.25% increase in dividend. This reflects the company’s healthy capital position supported by its solid operational performance. This Zacks Rank #2 (Buy) life insurer outperformed expectations in each of the last four quarters with an average earnings beat of 5.73%.

There were no estimate revisions in the last 7 days. We expect the strong second-quarter results and the recent approval of a dividend hike will induce analysts to raise their estimates. The Zacks Consensus Estimate is currently pegged at $4.25 for 2016 and $4.88 for 2017. These translate to a year-over-year growth of 14.2% and 14.7% in 2016 and 2017, respectively.

Stocks to Consider

Investors interested in the property and casualty space can consider players like Health Insurance Innovations, Inc. (NASDAQ:HIIQ) , Genworth Financial, Inc. (NYSE:GNW) and Sun Life Financial Inc. (TO:SLF) . While both Genworth Financial and Sun Life Financial hold a Zacks Rank #2 (Buy), Health Insurance Innovations sports a Zacks Rank #1 (Strong Buy).