Shares of StanCorp currently trade at 8.5x our earnings estimate for 2010, a 30% discount to the industry average of 12.2x. On a price-to-book basis, the shares trade at 1.0x, representing a 43% premium to the industry average of 0.7x. The valuation on a price-to-book basis looks fair, given a trailing 12-month ROE that is only 58% ahead of the industry average.
Our six-month target price of $36.00 equates to 7.8x our earnings estimate for 2010. Combined with the annual dividend of $0.80 per share, this target price implies a negative return of about 7.2% over that period. This is consistent with our Underperform recommendation on the shares.
STANCORP FNL CP (SFG): Free Stock Analysis Report
Zacks Investment Research
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