Citizens Inc. Stock Downgraded (CIA)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

NEW YORK ( TheStreet) -- Citizens (NYSE: CIA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • CIA's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • CIA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Insurance industry. The net income has significantly decreased by 86.6% when compared to the same quarter one year ago, falling from $3.01 million to $0.40 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, CITIZENS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.

Citizens, Inc., through its subsidiaries, provides life and health insurance policies in the United States and internationally. It primarily offers whole life insurance, endowments, credit insurance, final expense, and limited liability property policies. The company has a P/E ratio of 65.9, below the average insurance industry P/E ratio of 89.2 and above the S&P 500 P/E ratio of 17.7. Citizens has a market cap of $472.1 million and is part of the financial sector and insurance industry. Shares are down 4.9% year to date as of the close of trading on Tuesday.

You can view the full Citizens Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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