Globe Life Boosts Shareholder Value, Okays Buyback Program

The board of directors of Globe Life Inc. GL recently announced the authorization to buy back up to $1.8 billion of the company’s common shares under the existing stock repurchase program. This program replaces the earlier authorization of $1.3 billion, which was announced on April 29, 2024.Backed by a sustained operational performance, Globe Life has maintained a strong liquidity position with sufficient cash-generation capabilities. The parent company began the quarter with liquid assets of approximately $35 million and ended the quarter with approximately $85 million of liquid assets. It expects to conclude 2024 with liquid assets in the range of $50-$60 million, which the company had historically targeted. Globe Life targets a consolidated company action RBC ratio in the range of 300-320%. Globe Life can be considered a shareholder-friendly company as it has been actively increasing shareholders’ wealth through an ongoing buyback program that began in 1986. Since then, GL repurchased nearly $10 billion of shares.Strong capital position enables Globe Life to enhance its shareholder value via share buybacks and dividend payouts. For the nine months ended Sept. 30, 2024, the company repurchased 9.7 million shares at a total cost of $910 million. GL anticipates parent excess cash flows available to return to shareholders in 2025 will be approximately $575-$625 million. This is higher than 2024 due to the anticipated increases in statutory earnings in 2024 over 2023 and reflects the favorable impact of statutory valuation changes. For the third quarter of 2024, share repurchases were higher than expected as Globe Life increased share repurchases given the favorable market conditions and the additional capital raised during the quarter as the net proceeds from refinancing the term loan and the issuance of the senior note were about $100 million higher than previously assumed.Apart from this, Globe Life has continuously been increasing its dividend over the past eight years (2017-2024), witnessing a CAGR of 7%. In March 2024, it hiked its dividend by 6.7% to 24 cents per share. Dividends from subsidiaries and excess cash flows are projected to be higher in 2024 than in 2023, primarily due to lower life obligations and the growth in underwriting margins in 2023, both of which resulted in higher statutory earnings generated by the affiliates. Additional sources of liquidity for the Parent Company are cash, intercompany receivables, intercompany borrowings, debt markets, term loans and a revolving credit facility.Globe Life’s past performance depicted a robust earnings picture. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 4.58%.Share Price MovementShares of Chubb have gained 27.6% year to date compared with the industry’s growth of 14.5%. We expect premium growth, strength in distribution channels and strong operating fundamentals to further drive shares around in the near term. Globe Life currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Image Source: Zacks Investment ResearchOther Finance Stocks on the Same PathGiven a solid capital level in the finance sector and an improving operating backdrop favoring strong operational performance, stocks like RLI Corp. RLI, American Financial Group, Inc. AFG and The Hartford Financial Services Group, Inc. HIG have resorted to effective capital deployment to enhance shareholders’ value.RLI Corp.’s board of directors approved a special cash dividend of $4.00 per share in November 2024. This specialty property-casualty insurer has been paying special dividends since 2011. The latest approval marks the 15th straight special dividend. RLI expects to pay $183 million as a special dividend. RLI has been paying dividends for 187 consecutive quarters and increased regular dividends in the last 49 straight years. RLI’s diversified product portfolio, strong local branch-office network, focus on specialty insurance lines growth via organic opportunities and acquisitions and financial strength should continue to help boost shareholders’ returns.In November 2024, American Financial declared a special cash dividend of $4.00 per share in the third quarter, the aggregate amount of this special dividend will be approximately $335 million. American Financial Group’s 2.3% dividend yield is better than the industry average of 0.2%, making the stock an attractive pick for yield-seeking investors. AFG’s robust operating profitability at the property and casualty segment and effective capital management support shareholder returns.The Hartford Financial Services increased the quarterly common dividend per share by 11% in October 2024. Its capital appreciations, repayment of government funds and measures to de-risk its balance sheet have increased its financial strength. It also has an intelligent capital management strategy, featuring share buybacks and dividend hikes.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Hartford Financial Services Group, Inc. (HIG): Free Stock Analysis Report RLI Corp. (RLI): Free Stock Analysis Report American Financial Group, Inc. (AFG): Free Stock Analysis Report Globe Life Inc. 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