Zacks Investment Research Lowers Torchmark (NYSE:TMK) to Hold

Zacks Investment Research downgraded shares of Torchmark (NYSE:TMK) from a buy rating to a hold rating in a research note released on Monday, March 12th.

According to Zacks, “Shares of Torchmark have outperformed the industry in a year’s time.  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 expects net operating income between $5.90 and $6.10 per share in 2018. Life underwriting income is to grow 4-5% while health underwriting income to rise in the range of 3-5%. However, higher administrative expenses (6.5% of premium in 2018), pension costs and investments in IT systems are likely be a drag on Torchmark’s earnings in the near term. With respect to quarterly results, Torchmark’s fourth-quarter 2017 earnings outpaced the Zacks Consensus Estimate and improved year over year on higher premiums from the Life and Health segments.”

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Several other research firms have also issued reports on TMK. ValuEngine raised Torchmark from a hold rating to a buy rating in a research report on Friday, February 2nd. Wells Fargo set a $78.00 price target on Torchmark and gave the company a sell rating in a research report on Wednesday, February 7th. Finally, UBS started coverage on Torchmark in a research report on Friday, March 2nd. They set a sell rating and a $83.00 price target on the stock. Four analysts have rated the stock with a sell rating, five have assigned a hold rating and two have assigned a buy rating to the stock. Torchmark currently has a consensus rating of Hold and an average target price of $84.56.

Shares of TMK stock traded down $1.98 on Monday, hitting $82.98. 782,615 shares of the stock traded hands, compared to its average volume of 689,265. The company has a current ratio of 0.06, a quick ratio of 0.06 and a debt-to-equity ratio of 0.18. The firm has a market cap of $9,650.19, a P/E ratio of 17.22, a P/E/G ratio of 1.32 and a beta of 0.95. Torchmark has a 1-year low of $73.99 and a 1-year high of $93.60.

Torchmark (NYSE:TMK) last posted its quarterly earnings results on Wednesday, February 7th. The insurance provider reported $1.24 earnings per share (EPS) for the quarter, beating the Thomson Reuters’ consensus estimate of $1.23 by $0.01. The business had revenue of $1.06 billion for the quarter, compared to analyst estimates of $1.04 billion. Torchmark had a return on equity of 10.81% and a net margin of 34.99%. The business’s revenue was up 8.4% compared to the same quarter last year. During the same period in the prior year, the company posted $1.15 EPS. research analysts forecast that Torchmark will post 6.04 EPS for the current fiscal year.

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, May 1st. Investors of record on Tuesday, April 3rd will be paid a dividend of $0.16 per share. This is an increase from Torchmark’s previous quarterly dividend of $0.15. This represents a $0.64 dividend on an annualized basis and a yield of 0.77%. The ex-dividend date is Monday, April 2nd. Torchmark’s dividend payout ratio is presently 13.28%.

In related news, VP Michael Clay Majors sold 21,900 shares of the company’s stock in a transaction on Tuesday, February 27th. The stock was sold at an average price of $87.70, for a total transaction of $1,920,630.00. Following the completion of the transaction, the vice president now directly owns 11,921 shares in the company, valued at approximately $1,045,471.70. The sale was disclosed in a document filed with the SEC, which is available through this link. Also, CFO Frank M. Svoboda sold 12,375 shares of the stock in a transaction on Monday, March 12th. The stock was sold at an average price of $86.88, for a total value of $1,075,140.00. Following the completion of the transaction, the chief financial officer now directly owns 105,828 shares of the company’s stock, valued at approximately $9,194,336.64. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 78,275 shares of company stock valued at $6,796,120. 3.68% of the stock is owned by company insiders.

Several large investors have recently added to or reduced their stakes in TMK. Acadian Asset Management LLC grew its stake in shares of Torchmark by 245.8% in the fourth quarter. Acadian Asset Management LLC now owns 667,797 shares of the insurance provider’s stock worth $60,576,000 after purchasing an additional 474,661 shares in the last quarter. Goldman Sachs Group Inc. grew its stake in shares of Torchmark by 30.5% in the fourth quarter. Goldman Sachs Group Inc. now owns 1,825,563 shares of the insurance provider’s stock worth $165,597,000 after purchasing an additional 426,500 shares in the last quarter. Citadel Advisors LLC grew its stake in shares of Torchmark by 136.8% in the fourth quarter. Citadel Advisors LLC now owns 446,848 shares of the insurance provider’s stock worth $40,534,000 after purchasing an additional 258,183 shares in the last quarter. Bank of Montreal Can grew its stake in shares of Torchmark by 141.4% in the fourth quarter. Bank of Montreal Can now owns 251,670 shares of the insurance provider’s stock worth $22,829,000 after purchasing an additional 147,412 shares in the last quarter. Finally, Millennium Management LLC grew its stake in shares of Torchmark by 237.0% in the fourth quarter. Millennium Management LLC now owns 187,094 shares of the insurance provider’s stock worth $16,971,000 after purchasing an additional 131,575 shares in the last quarter. 74.75% of the stock is owned by institutional investors.

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Torchmark Company Profile

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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