The board of directors of Horace Mann Society of Educators HMN has approved a $50 million increase in its share buyback program to return more value to investors. HMN has already repurchased shares worth $95.5 million from 2011 to May 24, 2022.
Horace Mann is the largest multi-line financial services company serving the US educator market and is well positioned to capitalize on the strong opportunity in the K-12 educator market. An 8% increase in the number of K-12 teachers is projected between 2015 and 2027. A demographic shift is expected as baby boomers retire and millennials make up a higher percentage of the work force. Thus, HMN is well positioned to capitalize on the opportunity, given its strategic focus on product design. Strategic efforts have more than doubled its capital generation capacity.
The insurer is targeting average annual EPS growth of 10% and sustained double-digit ROEs, driven by growth from next year. HMN estimates to generate approximately $50 million in excess capital annually in 2022 and beyond to support growth initiatives, repurchase shares and increase dividends.
In addition to the recent share buyback approval, Horace Mann has increased its dividend for 14 consecutive years at a CAGR of 14%. Its current dividend yield of 3.1% is above the industry average of 2.2%. HMN pays over $50 million in cash dividends annually and is targeting a 50% dividend payout over the medium term.
HMN shares have gained 6.2% year-to-date, beating industry growth of 0.3%. Strategic initiatives aimed at fueling profitability, its focus on a niche market and its strong capital position should help the shares to rise even further.
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Horace Mann currently wears a Zacks rank #5 (high sell).
Given the strong level of capital in the insurance industry and the improving operating environment supporting strong operating performance, insurers like Unum Group A M, Everest Re Group, Ltd. RE and Chubb Limited CB used effective capital deployment to increase shareholder value.
Unum Group’s board has approved a 10% increase in its dividend to 33 cents per share. This recent dividend hike marked the 13th increase in the past 12 years. Over the past 11 years, Unum Group has cautiously shifted its business mix by increasing the proportion of voluntary products, adding Dental and Vision and divesting itself of the Closed Disability Block. Management remains focused on moving to a business mix with higher growth and stable margins. That should help the top disability income writer and second-largest volunteer enterprise writer in the United States keep its momentum going.
Everest Re Group’s board of directors has approved a 6.4% increase in its quarterly dividend to $1.65 per share. RE benefits from a steady increase in dividends, with the metric showing a nine-year CAGR (2014-2022) of 9.2%. Everest Re’s ongoing share buyback is also driving net income. Everest Re should benefit from its capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities. Everest Re benefits from a solid capital position with sufficient cash generation capabilities.
Chubb’s board approved a 3.75% increase in its dividend to $3.32 per share and a $2.5 billion share buyback program. This insurer has one of the largest product portfolios in the global insurance industry. CB is focused on cyber insurance which has immense room for growth, striving to capitalize on the potential of mid-market companies, both domestic and international, with a traditional core package as well as a specialized product. The improving pricing environment, new business growth and high renewal rates, along with other positives, should help it continue to deploy capital efficiently.
You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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