Torchmark Corp reports 4.5% revenue growth in 2016
01 Feb 2017 • About Torchmark Corp (
$TMK) • By InTwits
Torchmark Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Torchmark Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially unprofitable business model: ROIC is at 4.2%
- It operates with high leverage: Net Debt/EBITDA is 0.4x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Torchmark Corp ($TMK) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,590 | 3,772 | 3,620 | 3,766 | 3,935 | 4.5% |
| Net Income | 529 | 528 | 543 | 527 | 550 | 4.3% |
Balance Sheet
|
|---|
| Cash | 62 | 37 | 66 | 61 | 76 | 24.1% |
| Short Term Debt | 413 | 229 | 238 | 490 | 264 | -46.0% |
| Long Term Debt | 896 | 991 | 992 | 744 | 1,133 | 52.4% |
Cash flow
|
|---|
| Capex | 5 | 11 | 19 | 37 | 25 | -31.9% |
Ratios
|
|---|
| Revenue growth | 6.3% | 5.1% | -4.0% | 4.0% | 4.5% | |
| Net Income Margin | 14.7% | 14.0% | 15.0% | 14.0% | 14.0% | -0.0% |
| CAPEX, % of revenue | 0.1% | 0.3% | 0.5% | 1.0% | 0.6% | -0.3% |
| ROIC | 5.4% | 4.9% | 4.6% | 4.3% | 4.2% | -0.1% |
| ROE | 12.9% | 13.0% | 12.8% | 12.0% | 12.8% | 0.7% |
Revenue and profitability
Torchmark Corp's Revenue increased on 4.5% in 2016.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Torchmark Corp had CAPEX/Revenue of 0.64%. The company showed almost no change in CAPEX/Revenue from 2013 to 2016. It's average level of CAPEX/Revenue for the last three years was 0.72%.
Return on investment
The company operates at good ROE (12.75%) while ROIC is low (4.23%). ROIC showed almost no change in 2016. ROE increased slightly on 0.71 pp from 12.0% to 12.8% in 2016.
Leverage (Debt)
Debt surged on 13.3% in 2016 while cash surged on 24.1% in 2016.
Appendix 1: Peers in Life Insurance
Below we provide Torchmark Corp benchmarking against other companies in Life Insurance industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cathay Financial Hldg Co ($CFHS) | -25.4% | 58.9% | 14.8% | 9.3% | |
| Sagicor Financial Corp ($SFI) | 12.7% | -2.3% | -2.8% | 7.5% | |
| Shin Kong Financial Hldg Co ($SKFS) | 2.2% | 0.8% | 21.5% | 6.2% | |
| Prudential ($PRU) | 49.1% | -3.8% | 14.8% | -31.3% | |
| Partnership Assurance Group ($PA.) | 30.0% | -19.5% | 30.9% | -36.2% | |
| |
|---|
| Median (7 companies) | 30.0% | -3.8% | 14.8% | -31.3% | |
|---|
| Torchmark Corp ($TMK) | | 5.1% | -4.0% | 4.0% | 4.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sagicor Financial Corp ($SFI) | 1.9% | 1.8% | 2.1% | 1.6% | |
| Shin Kong Financial Hldg Co ($SKFS) | 0.4% | 0.3% | 0.4% | 0.8% | |
| Prudential ($PRU) | 0.3% | 0.4% | 0.3% | 0.6% | |
| Aviva ($AV.A) | 0.5% | 0.1% | 0.3% | 0.2% | |
| Cathay Financial Hldg Co ($CFHS) | 1.1% | 0.3% | 0.2% | 0.2% | |
| |
|---|
| Median (7 companies) | 0.4% | 0.3% | 0.3% | 0.2% | |
|---|
| Torchmark Corp ($TMK) | 0.1% | 0.3% | 0.5% | 1.0% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Cathay Financial Hldg Co ($CFHS) | 0.6% | 0.9% | 1.3% | 1.3% | |
| Prudential ($PRU) | 1.1% | 0.6% | 0.8% | 0.9% | |
| Aviva ($AV.A) | 0.4% | 0.7% | 1.0% | 0.6% | |
| Shin Kong Financial Hldg Co ($SKFS) | 0.8% | 0.8% | 0.7% | 0.5% | |
| Standard Life ($SL.) | 0.7% | 0.5% | 0.5% | 0.4% | |
| |
|---|
| Median (7 companies) | 0.7% | 0.8% | 0.7% | 0.6% | |
|---|
| Torchmark Corp ($TMK) | 5.4% | 4.9% | 4.6% | 4.3% | 4.2% |
