Torchmark Corp reports 8.5% Net Income growth in 2019
04 Feb 2020 • About Torchmark Corp (
$TMK) • By InTwits
Torchmark Corp reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- In the last 5 years the company invested considerably less than D&A: $127m vs. $517m
- The company has potentially unprofitable business model: ROIC is 4.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.6x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 5.2%.
Net Income margin increased slightly on 0.50 pp from 16.3% to 16.8% in FY2019.
Return on investment
The company operates at low ROIC (4.2%) and ROE (12.0%). ROIC showed almost no change in FY2019. ROE showed almost no change in FY2019. During the last 5 years ROIC bottomed in FY2017 at 4.2% and was growing since that time. During FY2015-FY2019 ROE topped in FY2017 at 26.9% and was declining since that time.
Leverage (Debt)
Debt decreased slightly on 1.0% while cash dropped on 37.3%.
Torchmark Corp has short term refinancing risk: cash is only 25.4% of short term debt.
Management team
The company's CEO Gary L Coleman is a founder and has spent 7 years with the company. Frank M Svoboda is a the company's CFO. Frank M Svoboda has spent 7 years at the company.
Financial and operational results
FY ended 30 Nov -0001
Torchmark Corp ($TMK) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 3,766 | 3,935 | 4,156 | 4,304 | 4,528 | 5.2% |
| Interest expence | | | | 90 | | |
| Tax | | | | 162 | | |
| Net Income | 527 | 550 | 1,454 | 701 | 761 | 8.5% |
Balance Sheet
|
|---|
| Cash | 61 | 76 | 119 | 121 | 76 | -37.3% |
| Short Term Debt | 490 | 264 | 328 | 308 | 299 | -3.0% |
| Long Term Debt | 744 | 1,133 | 1,132 | 1,357 | 1,349 | -0.6% |
Cash flow
|
|---|
| Capex | 37 | 25 | 20 | 45 | | |
| Dividends | | | | 71 | | |
Ratios
|
|---|
| Revenue growth | 4.0% | 4.5% | 5.6% | 3.6% | 5.2% | |
|
|---|
| Net Income Margin | 14.0% | 14.0% | 35.0% | 16.3% | 16.8% | 0.5% |
| CAPEX, % of revenue | 1.0% | 0.6% | 0.5% | 1.0% | | |
|
|---|
| ROIC | 4.3% | 4.2% | 4.2% | 4.2% | 4.2% | 0.0% |
| ROE | 12.0% | 12.8% | 26.9% | 12.0% | 12.0% | -0.1% |
| Interest expence / Average debt | | | | 5.8% | | |
People
|
|---|
| Employees | | | | 3,102 | | |
| Revenue/Employee, th. $ | | | | 1,387 | | |
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 ROIC, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Standard Life ($SL.) | 0.4% | 0.5% | 0.6% | | |
| Shin Kong Financial Hldg Co ($SKFS) | 0.5% | 0.4% | 0.6% | | |
| |
|---|
| Median (2 companies) | 0.6% | 0.6% | 0.7% | | |
|---|
| Torchmark Corp ($TMK) | 4.3% | 4.2% | 4.2% | 4.2% | 4.2% |
