Torchmark Corp reports 4.0% revenue growth in 2015
03 Feb 2016 • About Torchmark Corp (
$TMK) • By InTwits
Torchmark Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Torchmark Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has potentially unprofitable business model: ROIC is at 4.3%
- It operates with high leverage: Net Debt/EBITDA is 0.7x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Torchmark Corp ($TMK) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,377 | 3,590 | 3,772 | 3,620 | 3,766 | 4.0% |
| Net Income | 497 | 529 | 528 | 543 | 527 | -2.9% |
Balance Sheet
|
|---|
| Cash | 84 | 62 | 37 | 66 | 61 | -7.0% |
| Short Term Debt | 225 | 413 | 229 | 238 | 490 | 105.6% |
| Long Term Debt | 791 | 896 | 991 | 992 | 744 | -25.0% |
Cash flow
|
|---|
| Capex | 5 | 5 | 11 | 19 | 37 | 90.8% |
Ratios
|
|---|
| Revenue growth | 0.3% | 6.3% | 5.1% | -4.0% | 4.0% | |
| Net Income Margin | 14.7% | 14.7% | 14.0% | 15.0% | 14.0% | -1.0% |
| CAPEX, % of revenue | 0.2% | 0.1% | 0.3% | 0.5% | 1.0% | 0.4% |
| ROIC | 5.5% | 5.4% | 4.9% | 4.6% | 4.3% | -0.3% |
| ROE | 12.6% | 12.9% | 13.0% | 12.8% | 12.0% | -0.8% |
Revenue and profitability
The company's Revenue increased on 4.0% in 2015.
Net Income marign decreased slightly on 1.0 pp from 15.0% to 14.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Torchmark Corp had CAPEX/Revenue of 0.98%. Torchmark Corp showed small growth in CAPEX/Revenue of 0.85 pp from 0.13% in 2012 to 0.98% in 2015. Average CAPEX/Revenue for the last three years was 0.60%.
Return on investment
The company operates at good ROE (12.04%) while ROIC is low (4.29%). ROIC showed almost no change in 2015. ROE decreased slightly on 0.77 pp from 12.8% to 12.0% in 2015.
Leverage (Debt)
Debt showed almost no change in 2015 while cash decreased on 7.0% in 2015.
Appendix 1: Peers in Life Insurance
Below you can find Torchmark Corp benchmarking vs. other companies in Life Insurance industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aviva ($AV.A) | -38.8% | 40.7% | -20.4% | 25.6% | |
| Shin Kong Financial Hldg Co ($SKFS) | -5.8% | 2.2% | 0.8% | 21.5% | |
| Cathay Financial Hldg Co ($CFHS) | 41.4% | -25.4% | 58.9% | 14.8% | |
| Prudential ($PRU) | -23.4% | 49.1% | -3.8% | 14.8% | |
| Standard Life ($SL.) | -51.1% | 111.1% | -12.3% | -1.4% | |
| |
|---|
| Median (6 companies) | -24.2% | 26.7% | -3.0% | 14.8% | |
|---|
| Torchmark Corp ($TMK) | | 6.3% | 5.1% | -4.0% | 4.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sagicor Financial Corp ($SFI) | 1.3% | 1.9% | 1.8% | 2.1% | |
| Shin Kong Financial Hldg Co ($SKFS) | 0.2% | 0.4% | 0.3% | 0.4% | |
| Prudential ($PRU) | 0.3% | 0.3% | 0.4% | 0.3% | |
| Aviva ($AV.A) | 0.3% | 0.5% | 0.1% | 0.3% | |
| Cathay Financial Hldg Co ($CFHS) | 0.2% | 1.1% | 0.3% | 0.2% | |
| |
|---|
| Median (6 companies) | 0.2% | 0.5% | 0.3% | 0.3% | |
|---|
| Torchmark Corp ($TMK) | 0.2% | 0.1% | 0.3% | 0.5% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cathay Financial Hldg Co ($CFHS) | 0.5% | 0.6% | 0.9% | 1.3% | |
| Aviva ($AV.A) | 0.5% | 0.4% | 0.7% | 1.0% | |
| Prudential ($PRU) | 0.8% | 1.1% | 0.6% | 0.8% | |
| Shin Kong Financial Hldg Co ($SKFS) | 0.6% | 0.8% | 0.8% | 0.7% | |
| Standard Life ($SL.) | 0.5% | 0.7% | 0.5% | 0.5% | |
| |
|---|
| Median (6 companies) | 0.5% | 0.7% | 0.7% | 0.8% | |
|---|
| Torchmark Corp ($TMK) | 5.5% | 5.4% | 4.9% | 4.6% | 4.3% |
