Zacks_Analysts' Blog : Torchmark Splits Common Stock - Analyst Blog

The board of directors of Torchmark Corporation (TMK) has authorized a three-for-two partial stock split of its common stock.

Torchmark stated that the stock split will be carried out through a stock dividend issue. The 3:2 stock split will be paid in the form of a 50% stock dividend on all the company's outstanding common stock. The stock split will be effective June 1, 2011.

On July 1, 2011, the payment date, the common stock holders of Torchmark will receive one additional share of stock for every two shares held. Additionally, the fractional shares will be paid in cash.

Off late, the board of directors of  Molina Healthcare, Inc. (MOH) also authorized a three-for-two stock split of its common stock. Molina also stated that the stock split will be carried out through a stock dividend issue. Molina will issue stock dividend of one share of the company’s common stock for every two shares outstanding.

Also, Dollar Financial Corp. (DLLR) also issued a three-for-two stock split in the form of stock dividend recently.

Additionally, the board has also authorized a quarterly cash dividend of 11 cents per share. The dividend will be paid on all issued and outstanding shares including those shares issued on July 1, 2011 in the partial stock split.

Torchmark reported first-quarter 2011 operating income of $1.62 per share, lagging the Zacks Consensus Estimate by 2 cents. However, earnings grew 7% from $1.52 earned in the year ago quarter. The year-over-year improvement was driven by a higher underwriting income, coupled with increased investment income. Lower share count compared with last year, due to share repurchases, also buoyed the bottom-line.

In its earnings conference call, Torchmark guided 2011 net operating income in the range of $6.75 to $7.10 per share.

We maintain our Neutral recommendation on Torchmark. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.