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Horace Mann Educators Corp. (HMN)
NYSE:HMN
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Horace Mann Educators
(NYSE:HMN)
Rating:77Outperform
Price Target:
$48.00
▲(8.82% Upside)
Positive Factors
Capital Management
Horace Mann's excess capital position will be drawn down via a combination of top-line growth and material share buyback.
Earnings Performance
Horace Mann reported operating EPS of $1.62, above our $1.09 estimate and consensus of $1.02.
Strategic Focus
Horace Mann's strategy of selling mainly to schoolteachers via its captive salesforce is one that can bear meaningful fruit.
Negative Factors
Management Guidance
Management's recent KPI guidance track record is mixed.
Valuation Concerns
Valuation remains more than 10% less expensive compared to peers.
Horace Mann Educators (HMN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.80B
Dividend Yield3.13%
Average Volume (3M)267.64K
Price to Earnings (P/E)13.1
Beta (1Y)0.32
Revenue Growth6.01%
EPS Growth72.52%
CountryUS
Employees1,750
SectorFinancial
Sector Strength69
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.07
Shares Outstanding40,695,730
10 Day Avg. Volume279,661
30 Day Avg. Volume267,641
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)1.26
Price to Sales (P/S)1.05
P/FCF Ratio3.58
Enterprise Value/Market Cap1.30
Enterprise Value/Revenue1.44
Enterprise Value/Gross Profit1.45
Enterprise Value/Ebitda12.47
Forecast
1Y Price Target
$47.33Price Target Upside7.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Horace Mann Educators Business Overview & Revenue Model
Company DescriptionHorace Mann Educators Corporation, together with its subsidiaries, operates as an insurance holding company in the United States. It operates in three segments: Property & Casualty, Life & Retirement, and Supplemental & Group Benefits. The company underwrites and markets personal lines of property and casualty insurance, including personal lines auto and property insurance products; supplemental insurance products, which include cancer, heart, hospital, supplemental disability, and accident coverages; retirement products, such as tax-qualified fixed and variable annuities; and life insurance products comprising whole life and term, as well as indexed universal life insurance products. It also offers student loan solutions, including online student loan management accounts for educators. The company markets its products through its sales force of full-time exclusive agents to K-12 teachers, administrators, and other employees of public schools and their families. Horace Mann Educators Corporation was founded in 1945 and is headquartered in Springfield, Illinois.
How the Company Makes MoneyHorace Mann Educators Corporation generates revenue primarily through the sale of insurance policies and financial products. The company earns income from premiums collected on property and casualty insurance, such as auto and homeowners insurance, as well as from life insurance policies. Additionally, Horace Mann generates revenue through its retirement annuities, which include fixed and variable annuities. Investment income from the management of collected premiums and reserves also contributes significantly to the company's earnings. Horace Mann benefits from its specialized focus on the education sector, which allows it to build strong relationships and partnerships with educational institutions, enhancing its market penetration and customer loyalty.
Horace Mann Educators Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q1-2025)
| % Change Since: 4.18%|
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong overall performance with record-breaking core EPS, robust growth in sales across multiple segments, and significant improvements in the Property and Casualty segment. However, there were challenges such as increased catastrophe losses and higher mortality in the Life and Retirement segment. Despite these challenges, the company demonstrated solid progress towards its long-term goals and remains confident in its growth strategy.Q1-2025 Updates
Positive Updates
Record First Quarter Core EPS
Reported core EPS of $1.07, marking a 73% increase over the prior year and a record for the first quarter.
Strong Property and Casualty Segment Performance
Property and Casualty segment reported a combined ratio of 89.4%, a 10.5 point improvement over the prior year.
Significant Net Investment Income Growth
Total net investment income of $116 million, a 10% increase over prior year, with income on the internally managed portfolio up by 15%.
Robust Sales Growth Across Segments
Individual supplemental sales up 61%, auto sales up 8%, and annuity net contract deposits up 6%.
Increased Shareholder Returns
Board approved a dividend increase for the 17th consecutive year and executed $7 million in share repurchases.
Environmental Commitment Achievements
Achieved a 61% reduction in Scope 1 and Scope 2 emissions from the 2019 baseline.
Negative Updates
Higher Life and Retirement Segment Mortality
Earnings in Life and Retirement were below the prior year due to higher mortality rates, though within expected actuarial range.
Increased Catastrophe Losses
Catastrophe losses were $16.4 million, slightly above prior year, but excluding California wildfires, losses were below historical averages.
California Rate Increases Impacting New Business
Marginal impact on auto new business due to cumulative rate increases in California over the last two years.
Company Guidance
During the first quarter of 2025, Horace Mann Educators reported a record core EPS of $1.07, marking a 73% increase over the prior year. The company achieved a core return on equity of 10.6%, a 4.9 percentage point improvement from the previous year. Their Property and Casualty segment showed a robust performance with a combined ratio of 89.4%, improving by 10.5 points compared to the prior year. This segment's net written premiums rose by 8%, driven by higher average premiums. The Life and Retirement segment experienced lower earnings due to higher mortality but remained within actuarial expectations. The Individual Supplemental and Group Benefits segments witnessed a slight increase in core earnings, supported by strong customer demand and a 61% rise in individual supplemental sales. Total net investment income reached $116 million, a 10% increase from the previous year, with a notable 15% increase in income from their internally managed portfolio. Horace Mann reaffirmed its 2025 core EPS guidance range of $3.85 to $4.15, emphasizing its strategic focus on sustained profitable growth, backed by a diversified multiline business model.Horace Mann Educators Financial Statement Overview
Summary
Horace Mann Educators demonstrates strong financial health with consistent revenue growth and profitability. The balance sheet is stable with a solid equity base and controlled debt levels. Robust cash flow generation supports operational and strategic initiatives, though profitability margins can be further optimized.Income Statement
Horace Mann Educators shows a positive trajectory in its income statement. The TTM Gross Profit Margin is exceptionally high, suggesting efficient cost management. Net Profit Margin indicates profitability, though lower relative to gross margins. Revenue Growth Rate year-over-year is strong, indicating successful expansion and market penetration. However, EBIT and EBITDA Margins are moderate, suggesting room for operational efficiency improvements.78
Positive
Balance Sheet
The balance sheet of Horace Mann Educators reflects moderate financial stability. The Debt-to-Equity Ratio is stable, reflecting controlled leverage. Return on Equity is healthy, showcasing effective use of equity to generate profits. The Equity Ratio is strong, highlighting a solid capital structure with sufficient equity to cover liabilities. However, the overall debt levels should be monitored for any potential increase.70
Positive
Cash Flow
The cash flow statement indicates robust cash generation capabilities. Free Cash Flow has shown solid growth, and the Operating Cash Flow to Net Income Ratio is favorable, indicating efficient cash conversion. Free Cash Flow to Net Income Ratio is healthy, affirming strong cash retention after capital expenditures. The company should maintain this momentum to support future investments and dividends.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.63B | 1.55B | 1.43B | 1.34B | 1.25B | 1.29B |
| Gross Profit | 1.61B | 478.40M | 1.43B | 1.34B | 1.25B | 1.29B |
| EBITDA | 187.30M | 155.00M | 109.20M | 63.50M | 228.50M | 198.20M |
| Net Income | 114.50M | 102.80M | 45.00M | 19.80M | 170.40M | 133.30M |
Balance Sheet | ||||||
| Total Assets | 14.40B | 14.49B | 14.05B | 13.31B | 14.38B | 13.47B |
| Cash, Cash Equivalents and Short-Term Investments | 485.20M | 5.43B | 5.49B | 5.41B | 6.72B | 6.71B |
| Total Debt | 547.20M | 547.00M | 546.00M | 498.00M | 502.60M | 437.30M |
| Total Liabilities | 13.05B | 13.20B | 12.87B | 12.21B | 12.58B | 11.68B |
| Stockholders Equity | 1.34B | 1.29B | 1.18B | 1.10B | 1.81B | 1.79B |
Cash Flow | ||||||
| Free Cash Flow | 518.40M | 452.10M | 302.10M | 171.50M | 204.90M | 259.80M |
| Operating Cash Flow | 518.40M | 452.10M | 302.10M | 171.50M | 204.90M | 259.80M |
| Investing Cash Flow | -111.40M | -135.80M | -107.40M | -214.60M | -302.00M | -406.76M |
| Financing Cash Flow | -397.10M | -307.90M | -207.80M | -47.80M | 208.50M | 143.78M |
Horace Mann Educators Technical Analysis
Positive
44.11
Price Trends
42.11
Positive
41.77
Positive
40.46
Positive
Market Momentum
0.32
Negative
65.06
Neutral
80.14
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HMN, the sentiment is Positive. The current price of 44.11 is above the 20-day moving average (MA) of 41.65, above the 50-day MA of 42.11, and above the 200-day MA of 40.46, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 65.06 is Neutral, neither overbought nor oversold. The STOCH value of 80.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HMN.
Horace Mann Educators Risk Analysis
Horace Mann Educators disclosed 27 risk factors in its most recent earnings report. Horace Mann Educators reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Horace Mann Educators Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.80B | 13.08 | 10.91% | 3.13% | 6.01% | 72.52% | |
73 Outperform | $1.97B | 15.38 | 16.20% | ― | 22.11% | 5.78% | |
71 Outperform | $1.89B | 21.70 | 6.27% | 2.97% | 14.00% | 100.44% | |
68 Neutral | $1.62B | 12.44 | 23.90% | 1.14% | 20.89% | 3.25% | |
68 Neutral | $1.23B | 18.57 | 27.52% | ― | 98.66% | ― | |
64 Neutral | $1.06B | 12.42 | 10.08% | 5.07% | 18.52% | 65.66% | |
58 Neutral | HK$95.82B | 4.87 | -4.09% | 4.96% | 3.33% | -39.99% |
* Financial Sector Average
Performance Comparison
HMN
Horace Mann Educators
44.11
11.85
36.73%
SAFT
Safety Insurance Group
70.95
-4.75
-6.27%
STC
Stewart Information Services
67.41
0.86
1.29%
HCI
HCI Group
140.33
50.71
56.58%
ROOT
Root
88.26
41.56
88.99%
SKWD
Skyward Specialty Insurance Group, Inc.
48.72
14.58
42.71%
Horace Mann Educators Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Horace Mann Educators Amends Credit Agreement with PNC
Positive
May 22, 2025
On May 19, 2025, Horace Mann Educators Corporation amended its Credit Agreement with PNC Bank, extending the commitment termination date to May 19, 2030, and replacing the Eurodollar-based interest rate benchmark with a Term SOFR Rate. This amendment, which includes a Term SOFR Rate adjustment, aims to enhance financial flexibility and stability, potentially impacting the company’s financial operations and stakeholder interests positively.
The most recent analyst rating on (HMN) stock is a Hold with a $35.00 price target. To see the full list of analyst forecasts on Horace Mann Educators stock, see the HMN Stock Forecast page.
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Horace Mann Educators Holds Annual Shareholders Meeting
Neutral
May 15, 2025
On May 14, 2025, Horace Mann Educators Corporation held its Annual Meeting of Shareholders, where key decisions were made regarding the election of nine directors, approval of executive compensation, and the ratification of KPMG LLP as the company’s auditors for the year ending December 31, 2025. The results of the votes reflect continued support for the company’s leadership and strategic direction, which may influence its market positioning and stakeholder confidence.
The most recent analyst rating on (HMN) stock is a Hold with a $35.00 price target. To see the full list of analyst forecasts on Horace Mann Educators stock, see the HMN Stock Forecast page.
Executive/Board ChangesBusiness Operations and Strategy
Horace Mann Educators Appoints New Chief Accounting Officer
Positive
May 6, 2025
On May 5, 2025, Horace Mann Educators Corporation appointed Maureen Temchuk as Vice President, Controller, and Chief Accounting Officer, succeeding Ryan Greenier in the role of principal accounting officer. Ms. Temchuk, who previously served as a Managing Director at KPMG, brings extensive experience in the insurance and financial services sector. Her compensation package includes a base salary of $260,000, a signing bonus, and long-term incentive opportunities. This strategic appointment aims to strengthen the company’s financial leadership and enhance its operational capabilities in the competitive insurance market.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.