Head-To-Head Review: Torchmark (TMK) and Its Rivals

Torchmark (NYSE: TMK) is one of 38 public companies in the “Life insurance” industry, but how does it weigh in compared to its competitors? We will compare Torchmark to related companies based on the strength of its earnings, valuation, institutional ownership, dividends, profitability, risk and analyst recommendations.

Institutional & Insider Ownership

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74.7% of Torchmark shares are held by institutional investors. Comparatively, 49.3% of shares of all “Life insurance” companies are held by institutional investors. 3.7% of Torchmark shares are held by insiders. Comparatively, 18.9% of shares of all “Life insurance” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Torchmark and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Torchmark 34.99% 10.81% 2.52%
Torchmark Competitors 4.44% 4.85% 0.81%

Dividends

Torchmark pays an annual dividend of $0.64 per share and has a dividend yield of 0.8%. Torchmark pays out 13.3% of its earnings in the form of a dividend. As a group, “Life insurance” companies pay a dividend yield of 2.2% and pay out 28.7% of their earnings in the form of a dividend. Torchmark has raised its dividend for 8 consecutive years.

Valuation and Earnings

This table compares Torchmark and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Torchmark $4.16 billion $1.45 billion 17.55
Torchmark Competitors $22.05 billion $1.24 billion 15.95

Torchmark’s competitors have higher revenue, but lower earnings than Torchmark. Torchmark is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Torchmark has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Torchmark’s competitors have a beta of 1.07, indicating that their average stock price is 7% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Torchmark and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Torchmark 4 3 1 0 1.63
Torchmark Competitors 317 1125 1513 83 2.45

Torchmark currently has a consensus price target of $82.25, suggesting a potential downside of 2.64%. As a group, “Life insurance” companies have a potential upside of 9.95%. Given Torchmark’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Torchmark has less favorable growth aspects than its competitors.

Summary

Torchmark competitors beat Torchmark on 8 of the 15 factors compared.

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. The Health insurance products are guaranteed-renewable and include Medicare Supplement, critical illness, accident and limited-benefit supplemental hospital and surgical coverage’s. Annuities include fixed-benefit contracts. The Company markets its insurance products through various distribution channels, each of which sells the products of its insurance segments. Its subsidiaries include American Income Life Insurance Company (American Income) and Liberty National Life Insurance Company (Liberty National).

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