Horace Mann Educators - Value

Horace Mann Educators Corp.

 (HMN) reported strong third-quarter results in late October, which has boosted earnings estimates for this multi-line insurance provider. Moreover, with a price-to-book (P/B) ratio of just 0.62, this Zacks #2 Rank (Buy) is a true value pick.  

Strong Third Quarter

On October 24, Horace Mann Educators reported third quarter operating earnings of 62 cents per share, which was 55% above the Zacks Consensus Estimate. It also surged nearly 170% from 23 cents in the year-ago quarter. The quarter benefited from lower catastrophe losses and strong performances across all segments.

Total revenue slipped 1.6% year over year to $257 million in the quarter, but comfortably surpassed the Zacks Consensus Estimate by 3.8%.

Total benefits, losses and expenses declined 8.2% year over year, largely due to lower benefits, claims and settlement expenses.

Based on solid results at the annuity and life segments along with lower catastrophe losses, Horace Mann Educators expects to post operating earnings between $1.85 and $1.95 per share in 2012.

During the third quarter, the company spent $1.7 million to buy back 96,029 shares.

Recently, on Dec 5, the Board of Directors approved a 23% hike in its quarterly dividend. The increased dividend of 16 cents per share will be paid on Dec 31 to shareholders of record as of Dec 17.

Positive Earnings Estimate Revisions

The Zacks Consensus Estimate for 2012 increased 9.4% to $1.86 in the past 60 days, as both estimates moved north. This suggests a year-over-year increase of approximately 67.1%. For 2013, the Zacks Consensus Estimate increased by 1% to $2.05 over the same timeframe, as 1 of 2 estimates headed higher. This translates into a year-over-year increase of 10.5%.

Attractive Valuation

Along with a very attractive P/B multiple, Horace Mann Educators has a price-to-earnings (P/E) ratio as low as 10.5 (a P/B ratio under 3.0 and P/E ratio below 15.0 indicate value).

Moreover, the company has a 1-year return on equity (ROE) of 7.8%, higher than its peer group average of 5.5%.

Headquartered in Springfield, Illinois and founded in 1945, Horace Mann Educators Corp., through its subsidiaries, provides services that primarily focus on the financial needs of educators. Operating in the Unites States with 1,596 employees, Horace Mann provides auto and homeowners insurance, retirement annuities, life insurance and other financial solutions. It has a market cap of $763.9 million.

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HORACE MANN EDS (HMN): Free Stock Analysis Report
 
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