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Kemper Corporation Upped to Strong Buy

Zacks Equity Research

On Nov 12, Zacks Investment Research upgraded Kemper Corporation (KMPR) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Kemper Corporation has been witnessing rising earnings estimates on the back of strong third-quarter 2013 results. Moreover, this multiline insurer delivered positive earnings surprises for 3 straight quarters with an average beat of 51.5%. The long-term expected earnings growth rate for this stock is 10%.    

Kemper reported third-quarter 2013 results on Oct 31. Non-GAAP earnings per share came in at 69 cents, surpassing the Zacks Consensus Estimate of 44 cents by 56.8%. The results also surged 64.3% from the year-ago quarter number.

The bottom-line growth of Kemper was driven by better performance in underlying property and casualty and higher net investment income. Lower share count due to share buybacks also boosted the bottom line.

Total revenues of $635.7 million of Kemper also surpassed the Zacks Consensus Estimate by 8.8%. Total expenses declined 5.4% year over year to $533.7 million. The improvement came on the back of lower Policyholders’ benefits and Incurred losses and loss adjustment expenses. Lower insurance, interest and other expenses also aided the improvement.

In the third quarter, Kemper spent $36.3 million to buy back over 1 million shares. Kemper also paid total dividend of $13.6 million.

The Zacks Consensus Estimate for 2013 increased 5.4% to $2.35 per share. 1 of 2 estimates was revised higher over the last 30 days. For 2014, again 1 of 3 estimates was raised over the same time frame pushing the Zacks Consensus Estimate up by 1.6% to $2.45 per share.

Other Stocks to Consider

Other well-performing multi-line insurers like Old Republic International (ORI) with a Zacks Rank #1 (Strong Buy), and Assurant Inc. (AIZ) and Cigna Corp. (CI) with a Zacks Rank #2 (Buy) are also worth considering.

Read the Full Research Report on KMPR
Read the Full Research Report on AIZ
Read the Full Research Report on CI
Read the Full Research Report on ORI

Zacks Investment Research