NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Highlights from the ratings report include:
- HMN's revenue growth trails the industry average of 20.7%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HORACE MANN EDUCATORS CORP has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HORACE MANN EDUCATORS CORP increased its bottom line by earning $1.96 versus $1.81 in the prior year. For the next year, the market is expecting a contraction of 51.5% in earnings ($0.95 versus $1.96).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Insurance industry average. The net income increased by 15.0% when compared to the same quarter one year prior, going from $20.17 million to $23.20 million.
- HMN's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 26.31%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.
Horace Mann Educators Corporation, through its subsidiaries, markets and underwrites personal lines of property and casualty insurance, retirement annuities, and life insurance in the United States. The company has a P/E ratio of 10.2, below the average insurance industry P/E ratio of 10.7 and below the S&P 500 P/E ratio of 17.7. Horace Mann Educators has a market cap of $498.2 million and is part of the
industry. Shares are down 23.3% year to date as of the close of trading on Friday.
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