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Estimates for Kemper Corporation KMPR have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The stock has witnessed the Zacks Consensus Estimate for earnings being raised 5.8% to $4.55 and 17.2% to $5.37 for 2018 and 2019, respectively.
The company mainly offers property and casualty as well as life and health insurance to its clients and carries a favorable Growth Score of B. Shares of this Zacks Rank #2 (Buy) Multi line insurer have soared nearly 71.6% in a year’s time against the industry’s decline of 4.8%.
Kemper’s focus on improving as well as strengthening its core businesses, continued increase in premiums and a solid capital position should consistently drive favorable results in the near term.
Let’s focus on the factors that make Kemper a stock to invest in for attractive returns.
Consistent Premium Growth: Kemper has been exhibiting continuous improvement in its premiums, primarily due to higher premiums across its segments. With the company’s businesses performing well, we expect the Multi line insurer to deliver premium growth in the near term, consequently driving overall performance.
Better Investment Results: With the gradual improvement in interest rates, the insurer has been witnessing better investment results over the past few years. We expect the momentum to continue in the upcoming quarters on the back of rising interest rates and higher level of investments in fixed maturity securities.
Growing Top Line: Driven by continued premium growth and better investment results, the company has been exhibiting top-line growth over a considerable period of time. Additionally, the improvement in revenues across the insurer’s businesses has also been contributing to the growth. We anticipate this top-line improvement to further accelerate the company’s overall growth.
Strong Performing Segments: The Multi line insurer has been focusing on the execution of several initiatives, which in turn have added value to both life and health as well as preferred home and auto businesses. Riding on the strength of higher revenues across the businesses, the insurer has been adding substantial value to the organization and we expect this to continue in the future, resulting in long-term growth.
Solid Capital Position: A sturdy capital position has enabled the company to add shareholder value through share buybacks and dividend payouts. With respect to dividends, the company estimates its direct insurance subsidiaries to pay about an additional $70.6 million in dividends (the direct subsidiaries paid $130.4 million of the same in the first half of 2018) for the remainder of 2018.
Growth Projections: The Zacks Consensus Estimate for current-year earnings per share is pegged at $4.55, representing a whopping year-over-year surge of about 177.4% on 37.9% stronger revenues of $3.8 billion. For 2019, the bottom line per share is pegged at $5.37, reflecting a year-over-year rise of 17.9% on 28.5% revenue growth of $4.8 billion.
Positive Earnings Surprise History: Kemper’s surprise history reflects its diligent operational efficiency with the company having delivered positive surprises in the last four quarters, the average beat being 90.78%.
Other Stocks to Consider
Investors interested in other top-ranked stocks from the insurance industry can also consider The Progressive Corporation PGR, NMI Holdings Inc. NMIH and The Navigators Group, Inc. NAVG, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Progressive Corporation provides personal and commercial auto insurance, residential property insurance and other specialty property-casualty insurance plus related services, primarily in the United States. The company delivered positive surprises in the preceding four quarters with an average earnings surprise of 9.19%.
NMI Holdings provides private mortgage guaranty insurance services in the United States. The company pulled off positive surprises in the trailing four quarters with an average positive surprise of 29.85%.
Navigators Group underwrites marine, property and casualty plus professional liability insurance products and services in the United States and globally. The company came up with positive surprises in three of the previous four quarters with an average beat of 19.54%.
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