Zacks Investment Research Lowers Torchmark (TMK) to Hold

Zacks Investment Research cut shares of Torchmark (NYSE:TMK) from a buy rating to a hold rating in a report published on Tuesday, December 26th.

According to Zacks, “Shares of Torchmark have outperformed the industry quarter to date. Torchmark’s niche market focus, steady capital deployment and strong operating fundamentals should drive long-term growth. The insurer estimates life and health sales growth in distribution channels. Also, a strong capital position and capital management are key positives. Torchmark now expects net operating income between $4.77 and $4.83 per share in 2017 on positive outlook for life underwriting income at American Income and health insurance businesses. For 2018, it guides the bottom line between $5 and $5.25 per share. Life underwriting income is to grow in 4%-5% range while health underwriting income in 3%-5% range. However, higher administrative expenses (6.4% of premium in 2017), pension costs and investments in IT systems will likely be a drag on Torchmark’s earnings in the near term.”

Several other research firms also recently commented on TMK. Keefe, Bruyette & Woods restated a hold rating and issued a $78.00 price target on shares of Torchmark in a research note on Sunday, October 8th. SunTrust Banks boosted their price target on shares of Torchmark from $75.00 to $85.00 and gave the stock a hold rating in a research note on Thursday, October 26th. Finally, Goldman Sachs Group began coverage on shares of Torchmark in a research report on Wednesday, October 18th. They set a neutral rating and a $83.00 price objective for the company. One investment analyst has rated the stock with a sell rating, five have assigned a hold rating and two have issued a buy rating to the company’s stock. The company has an average rating of Hold and a consensus target price of $81.67.

Torchmark (NYSE:TMK) opened at $92.25 on Tuesday. The firm has a market cap of $10,720.39, a P/E ratio of 19.63, a price-to-earnings-growth ratio of 2.40 and a beta of 1.01. The company has a quick ratio of 0.06, a current ratio of 0.06 and a debt-to-equity ratio of 0.22. Torchmark has a 12 month low of $72.59 and a 12 month high of $93.34.

Torchmark (NYSE:TMK) last announced its quarterly earnings results on Tuesday, October 24th. The insurance provider reported $1.23 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $1.20 by $0.03. Torchmark had a net margin of 13.80% and a return on equity of 11.60%. The business had revenue of $1.05 billion during the quarter, compared to the consensus estimate of $1.03 billion. During the same quarter last year, the firm earned $1.15 EPS. The business’s revenue was up 5.7% compared to the same quarter last year. sell-side analysts predict that Torchmark will post 4.8 earnings per share for the current fiscal year.

The company also recently declared a quarterly dividend, which will be paid on Thursday, February 1st. Stockholders of record on Friday, January 5th will be paid a dividend of $0.15 per share. The ex-dividend date is Thursday, January 4th. This represents a $0.60 dividend on an annualized basis and a dividend yield of 0.65%. Torchmark’s dividend payout ratio (DPR) is 12.77%.

In other Torchmark news, insider Roger C. Smith sold 30,000 shares of the company’s stock in a transaction dated Thursday, October 26th. The shares were sold at an average price of $84.50, for a total transaction of $2,535,000.00. Following the transaction, the insider now directly owns 65,685 shares in the company, valued at $5,550,382.50. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, EVP W Michael Pressley sold 52,500 shares of the company’s stock in a transaction dated Thursday, October 26th. The shares were sold at an average price of $83.93, for a total transaction of $4,406,325.00. Following the completion of the sale, the executive vice president now directly owns 105,948 shares in the company, valued at approximately $8,892,215.64. The disclosure for this sale can be found here. Over the last quarter, insiders have sold 234,335 shares of company stock worth $20,167,546. Company insiders own 3.79% of the company’s stock.

Large investors have recently bought and sold shares of the business. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp increased its position in shares of Torchmark by 13.0% in the third quarter. BRITISH COLUMBIA INVESTMENT MANAGEMENT Corp now owns 34,860 shares of the insurance provider’s stock worth $2,792,000 after acquiring an additional 4,000 shares in the last quarter. Atlantic Trust Group LLC increased its position in shares of Torchmark by 6.5% in the third quarter. Atlantic Trust Group LLC now owns 53,358 shares of the insurance provider’s stock worth $4,274,000 after acquiring an additional 3,245 shares in the last quarter. OMERS ADMINISTRATION Corp acquired a new stake in shares of Torchmark in the second quarter worth $1,727,000. Zurcher Kantonalbank Zurich Cantonalbank increased its position in shares of Torchmark by 6.9% in the third quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 23,592 shares of the insurance provider’s stock worth $1,889,000 after acquiring an additional 1,518 shares in the last quarter. Finally, Mitsubishi UFJ Kokusai Asset Management Co. Ltd. increased its position in shares of Torchmark by 9.0% in the third quarter. Mitsubishi UFJ Kokusai Asset Management Co. Ltd. now owns 17,448 shares of the insurance provider’s stock worth $1,397,000 after acquiring an additional 1,446 shares in the last quarter. 72.46% of the stock is currently owned by institutional investors.

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About Torchmark

Torchmark Corporation (Torchmark) is an insurance holding company. The Company, through its subsidiaries, provides a range of life and health insurance products and annuities to a base of customers. The Company’s segments include life insurance, health insurance, annuities and investment. The life insurance segment includes traditional and interest-sensitive whole life insurance as well as term life insurance.

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