Primerica sets $450 million stock buyback plan

DULUTH, Ga. - Primerica, Inc. (NYSE: NYSE:), a leading provider of financial services in North America, has announced a new share repurchase program authorized by its Board of Directors. The company plans to buy back up to $450 million of its shares by December 31, 2025. This decision follows the reporting of robust 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, contingent upon market conditions and other influencing factors. Primerica's commitment to executing the buyback is governed by regulatory guidelines and laws, specifically Rule 10b-18 of the Securities Exchange Act of 1934.

Glenn Williams, Chief Executive Officer of Primerica, expressed satisfaction with the company's revenue growth and free cash flow generation, which underpin the Board's decision to initiate the share repurchase. However, the company clarified that the Board of Directors retains the discretion to terminate the program at any time and there is no mandate 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 insuring approximately 5.7 million lives and managing around 2.9 million client 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 statement from Primerica, Inc.

In other recent news, Primerica, Inc. reported robust financial results for Q3 2024, with a 21% year-over-year increase in adjusted net operating income to $193 million and a 28% rise in diluted adjusted operating earnings per share to $5.68. The company's life licensed sales force grew by 7% and new Term Life policies issued increased by 5%. Furthermore, Primerica returned $463 million to shareholders through stock repurchases and dividends. The company also announced strategic initiatives, including a partnership with Canada Life and a focus on debt consolidation services.

In addition, Primerica forecasts a 22% to 25% sales growth in the Investment and Savings Products segment for 2024. However, the Corporate and Other Distributed Products segment reported a pre-tax operating loss of $5.7 million, and operating expenses are expected to rise by 9% in Q4. Despite these challenges, Primerica continues to demonstrate resilience with strong sales force and policy growth.

These are among the recent developments for Primerica, indicating a strategic focus on growth areas and a positive outlook despite operational cost increases and persistent consumer environment challenges.

InvestingPro Insights

Primerica's recent announcement of a $450 million share repurchase program aligns well with its strong financial performance and shareholder-friendly policies. According to InvestingPro data, the company has demonstrated impressive growth, with revenue increasing by 12.27% over the last twelve months as of Q3 2024, reaching $3.14 billion. This robust top-line expansion supports the company's ability to fund the buyback program.

InvestingPro Tips highlight Primerica's commitment to shareholder returns, noting that the company has raised its dividend for 15 consecutive years. This track record of dividend growth, combined with the new share repurchase 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 last twelve months. These figures indicate Primerica's efficient operations and ability to generate substantial cash flows, which are crucial for sustaining both dividend payments and share buybacks.

Investors may find Primerica's current valuation intriguing, as the stock is trading near its 52-week high with a price-to-earnings ratio of 14.36 (adjusted for the last twelve months). This relatively modest P/E ratio, coupled with the company's growth profile and shareholder return policies, may suggest potential value for investors.

For those interested in a deeper analysis, InvestingPro offers 11 additional tips on Primerica, providing a more comprehensive view of the company's financial health and market position.

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