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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Primerica, Inc. (XNYS:PRI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PRI
Name:
PRIMERICA, INC. (XNYS:PRI)
Sector:
206.62M
Industry:
Insurance�Life
CEO:
Mr. Glenn Williams
Total Employees:
2,891
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -104.04% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PRIMERICA, INC.(PRI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�LIFE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
123.1
One Month Price Target:
$123.97
Six Month Price Target :
$128.34
Likely Price in One Year's Time:
Ticker:
$133.59
Likely Trading Range Today Under (Normal Volatility)
$122.59
Price Upper limit ($) :
$123.65
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$116.69
This week:
$108.78
This month :
$94.45
Other Primary facts
Market Cap:
4.60B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
37.45M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.93%
-16.57%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$152.84
$139.27
$93.36
$106.93
Medium risk (<10%) entry points
Buy Call
Sell Call
$134.85
Buy Put:
Sell Put:
$131.95
$111.31
$114.25
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PRI
Sharpe Ratio:
0.38%
Comparison:
PRI, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -70.24% lower than the industry
& is -83.12% lower than the market/S&P 500 average
Average Returns/Yield of
PRI
Daily returns:
0.02%
Weekly returns:
0.09%
Monthly returns:
0.37%
Yearly returns:
12.17%
Comparison of returns:
Average annual returns/yield (last 3 years) is -63.27% below industry average
Classification:
PRI, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.98
Statistical test of Returns:
PRI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.54%
Weekly Volatility:
5.69%
Monthly Volatility:
11.37%
Yearly Volatility:
39.39%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.00%
Volatility in last five trading days has been -60.86% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.20%
Weekly VaR:
-11.64%
Monthly VaR:
-23.27%
How Much Can the price of
PRI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-80.61%
This translates to price declining to:
$98.03
This translates to price declining to:
$23.87
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
PRI is a 64.24% riskier investment compared to the market/S&P 500 & is 40.70% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -16.96% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PRI
Beta in relation to market/S&P 500--1.27
Expected beta in 1 year's time:
0.796
Expected beta in 3 year's time:
1.126
Unlevered (debt free) Beta:
0.717
Beta in relation to Nasdaq (XNAS):
0.871
Beta in relation to all global stocks::
0.891
Beta Comparison & Analysis
Beta of competitors/peers::
1.27
Beta is -0.19% lower than peers
Average Industry Beta:
1.194
Beta is 6.19% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.63%
Sustainable growth rate is 72.79% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.074
Alpha is -972.65% below industry average alpha yield
Alpha is -469% below the market average
Analysis of Cost of Capital of
PRI
Equity cost of capital:
0.118
Equity cost of capital is 4.47% above industry mean WACC
Unlevered (without debt) cost of capital:
6.70%
Before-tax cost of debt:
3.02%
After-tax cost of debt:
2.38%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.38%
WACC is -5.09% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$74.61
Revenue growth rate per share of (3Y):
2.39
Annual revenue growth rate is 176.45% above the industry average
EPS:
$8.98
Expected Annual growth rate of EPS (3Y):
2.74%
Expected future EPS growth rate is -32.44% lower than the Insurance�Life industry
Free cash flow (FCF) per share:
$18.30
Balance sheet equity growth per share: 87.44%
Equity growth rate per share is 1049.51% higher than the industry
Debt per share
$54.31
EBITDA per share
$15.60
Valuation Analysis Today of
PRI
P/E Ratio:
14.4
P/E Ratio of Competitors/Peers:
5.72
P/E ratio is 151.56% higher than main peers & is 48.19% higher than the industry
Stock price/value with industry average P/E ratio: $87.24
PRI is 41.11% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $46.80
Present value of the expected future dividends only: $32.45
P/S (Price to Sales ratio):
1.65
Price to sales ratio is 53.45% above the industry mean
P/B (Price to book value ratio):
2.39
Price to free cash flow: 6.73
Price to free cash flow ratio is -25.65% lower than the industry
Net income growth rate (3Y):
27.23%
Net income growth rate is 19.33% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 6.07%
Dividend yeild: 1.66%
Previous Dividend: $0.55
Previous adjusted dividend: $0.55
Previous Dividend: $2.04
Expected next dividend best case: $0.61
Expected next dividend worst case: $0.49
Average dividend payment (long-term): $0.45
Average dividend increase/decrease (growth rate) % per period: 5.22%
Expected next dividend payment date: 09/12/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 08/03/2022
Previous dividend payment date: 14/06/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 05/05/2022
Dividend History:
2022-05-19--$0.55
2021-11-19--$0.47
2021-05-20--$0.47
2022-02-18--$0.55
2021-08-19--$0.47
2021-02-19--$0.47
Dividend growth rate is 58.31% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
105.61%
Net debt to equity ratio:
87.24%
Debt to assets ratio:
12.77%
Net debt to assets ratio:
10.55%
Debt-to-asset ratio is -85.43% below industry average
Ability to repay debt:
Interest coverage ratio:
9.49
Interest coverage ratio is 127.09% more than industry average
Looking forward:
Debt growth rate:
-99.28%
Annual debt growth is 549% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.44%
Analysis of Key Statistics
Correlation of price movement with the market:
0.737
Statistical significance of correlation:
PRI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.695
Stock price is 6.10% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.695
Correlation of price movement with Nasdaq (^IXIC):
0.011
Covariance of price movement with the market:
0.017
Kurtosis
9.595
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.268
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PRI
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
2.37%
Operating profit margin is -165.22% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
27.37%
Effective tax rate is 34.74% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.51%
Return on equity (ROE) is 488.13% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.24%
Return on assets (ROA) is 166.42% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
25.2
Current ratio is 0.00% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 7.7 years
Stock based compensation to net income ratio:
3.49%
In-depth Efficiency Analysis
Revenue generated per employee:
966.6K
Each employee generates -49% less revenue than industry average revenue per employee
EBITDA generated per employee:
202.1K
Each employee generates -37% less EBITDA than industry average revenue per employee
Profit generated per employee:
123.3K
Each employee generates -47% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
71.5K
Each employee generates 34% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.6M
Each employee generates 34% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PRI
JANUS HENDERSON GROUP PLC (XNYS:JHG)
Grupo Aval Acciones y Valores SA (XNYS:AVAL)
CHARGEPOINT HOLDINGS, INC. (XNYS:CHPT)
UNUM GROUP (XNYS:UNM)
EVERCORE INC. (XNYS:EVR)
PROSPERITY BANCSHARES, INC. (XNYS:PB)
Woori Financial Group Inc. (XNYS:WF)
AFFILIATED MANAGERS GROUP, INC. (XNYS:AMG)
ARES-PA
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
2.79B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
724.09M
-
-
-
-
77.29M
77.29M
- 15515.00K
61.56M
33.12M
584.22M
66.30M
356.55M
485.87M
132.99M
356.55M
Statement of Cash Flow
Date:
Period:
8.69M
Differed Income Tax :
-
Stock Based Compensation :
12.44M
Change in Working Capital :
16.47M
Accounts Receivables:
33.83M
Other Working Capital:
19.18M
Other Non-Cash Items:
97.94M
Net Cash Provided by Operating Activities:
214.30M
Investments in PP&E:
- 7676.00K
Net Acquisitions:
3.87M
Purchases of Investments:
- 250976.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
359.78M
2.75B
3.11B
4.79B
-
-
-
46.13M
179.15M
193.40M
4.19B
-
-
4.61B
20.54B
15.93B
574.85M
6.00M
217.33M
-
-
580.85M
2.03B
-
2.03B
15.46B
14.00B
388.00K
1.98B
- 54670.0K
-
March 31, 2022 at 6:00:00 AM
1.65B
1.93B
15.93B
6.94B
2.04B
1.7B
142.11M
-
- 112672.00K
- 9064.00K
-
- 99010.00K
- 21645.00K
- 4852.00K
- 134571.00K
222.00K
- 32722.00K
359.78M
392.50M
214.30M
- 7676.00K
206.62M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
PRI
2023
2024
2025
2026
2027
$129.90
$140.97
$152.98
$166.01
$180.15