FBL Financial Group, Inc. – Value Analysis (NYSE:FFG) : November 7, 2017

Capitalcube gives FBL Financial Group, Inc. a score of 57.

Our analysis is based on comparing FBL Financial Group, Inc. with the following peers – Fidelity & Guaranty Life, Unum Group, Prudential plc and CNO Financial Group, Inc. (FGL-US, UNM-US, PUKPF-US and CNO-US).

Fundamental Overview

FBL Financial Group, Inc. has a fundamental score of 57 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.42 is about median in its peer group.
  • The market expects FFG-US to grow faster than its peers and for the company to improve its current ROE.
  • FFG-US‘s relatively high profit margins are burdened by capital inefficiency.
  • Changes in the company’s annual revenue and earnings are around the median among its peers.
  • FFG-US‘s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • While FFG-US‘s revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median P/E ratio.
  • The company’s equity capital investment seems appropriate for a business with peer median returns.
  • FFG-US has the financial and operating capacity to borrow quickly.

Drivers of Margin

  • Margins suggest relatively better discipline in controlling operating costs than in writing policies.
  • The company’s comparatively low underwriting margins (i.e. premiums earned minus insurance losses, expressed as a percentage of premiums earned) of -190.14% versus a peer median of -56.76% suggests that it follows a non-differentiated strategy and/or has not been conservative in writing policies. However, FFG-US‘s pre-tax margins are above the peer median (pre-tax margin of 20.14% compared to 12.92%) suggesting relatively tight control on operating costs.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

FBL Financial Group, Inc. is a holding company, which engages in the sale of individual life insurance and annuity products. It operates through the following segments: Annuity, Life Insurance, and Corporate and Other. The Annuity segment is consists of fixed rate and indexed annuities and supplementary contracts. The Life Insurance segment is the whole life, term life, and universal life policies which provides benefits upon the death of the insured and may allow the client to build cash value on a tax-deferred basis. The Corporate and Other segment includes advisory services, marketing and distribution services, leasing services with affiliates, closed blocks of variable annuity, interest expense, and investments and related investment income. The company was founded in October 1993 and is headquartered in West Des Moines, IA.