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Torchmark’s Operating Income Rose in 3Q15

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Torchmark’s price movement

Torchmark (TMK) has a market capitalization of $7.3 billion. Torchmark’s YTD (year-to-date) price movement has been increasing with the company’s rise in net income quarter-over-quarter in 2015.

After its 3Q15 earnings report, Torchmark fell by 0.98% to close at $58.45 per share as of October 26, 2015. The price movements on a weekly, monthly, and YTD basis are 0.85%, 2.1%, and 8.9%, respectively.

Technically, Torchmark has broken the support of its 20-day, 50-day, and 200-day moving averages a few times in 2015. Currently, it’s trading 1.8% above its 20-day moving average, 1.0% above its 50-day moving average, and 3.4% above its 200-day moving average.

The SPDR S&P Insurance ETF (KIE) invests 2.1% of its holdings in Torchmark. The ETF tracks an equal-weighted index of insurance companies as defined by the GICS (Global Industry Classification Standard). The ETF’s YTD price movement was 8.3% as of October 23, 2015.

Torchmark’s competitors and their market capitalizations are as follows:

  • Prudential Financial (PRU) — $37.0 billion
  • Unum Group (UNM) — $8.2 billion
  • CNO Financial Group (CNO) — $3.7 billion
  • Primerica (PRI) — $2.4 billion
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Performance of Torchmark in 3Q15

Torchmark reported an underwriting income of $156.6 million in 3Q15, a rise of 3.6% when compared to its underwriting income of $151.2 million in 2Q15. The company’s Health – Part D underwriting margin segment rose by 3.4% and 77.0%, respectively, and its Health segment fell by 2.7% in 3Q15.

Net sales from the company’s Life segment and Health – Part D segment fell by 6.6% and 18.8%, respectively. Sales from its Health segment rose by 5.4% in 3Q15. Its net operating income and EPS (earnings per share) rose to $135.6 million and $1.08 per share in 3Q15, as compared to net operating income and EPS of $133.5 million and $1.05 per share in 2Q15.

The company’s net income rose to $145.4 million in 3Q15, an increase of 14.4% on a quarterly basis. Total investments and cash fell by 0.01% and 5.4%, respectively, in 3Q15 on a quarterly basis. The company’s debt-to-equity ratio rose to 3.69 in 3Q15 as compared to a debt-to-equity ratio of 3.64 in 2Q15.

On September 14, 2015, Torchmark declared a quarterly dividend of $0.135 per share on its outstanding common stock.

About Torchmark

Torchmark is a financial services company. It provides life insurance and supplemental health insurance services to middle-income clients. It markets its services through multiple distribution channels including direct response, exclusive, and independent insurance agencies.

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