Primerica, Inc. (PRI): Dominance For One Financial Firm

The company does show a reasonably low dividend yield of just 1%, but shows a current P/E of 10.9 (8.9 lower than the industry average) with a forward P/E of 9.5. The company spun off from  Citi in April of 2010, and shows an earnings yield of 9.2%. EPS and revenues have decreased in the past few years, but this is largely due to the spin off  agreement with Citi. From my understanding all of Primerica’s life insurance premiums before 2010 go directly to Citi, so the company has essentially started over.

The company has continually bought back shares, and currently shows a 91% institutional ownership. Legg Mason owns 2% less of its own company but is the closest competitor to Primerica in that regard. Primerica soared 33% in the hours following its IPO and has continued this trend. Shareholders of Primerica cannot be disappointed with the company’s performance. Looking at the graph below it shows just how successful the stock has been  – it has outperformed its closest competitor by more than 300%. Check it out.

PRI data by YCharts

The Foolish Conclusion…

Invesco, Prudential, Legg Mason, and MetLife are all good companies with some good metrics. They may all present opportunities for investors, but none compare to that of Primerica’s. What do these companies offer than Primerica doesn’t? Primerica’s business model seems nearly flawless – use an educational approach to market financial services/products to 85% of Americans (the middle class) that these other companies have abandoned.

Primerica has shown unprecedented success with its stock, and is now focused on growing its sales force even more. Recently the company has become more focused on the investment side of financial services, and the results should be astounding. I don’t see any reason why the company won’t continue to succeed as long as it stays true to its values.

The article Dominance For One Financial Firm originally appeared on Fool.com.

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