On Jan 22, Zacks Investment Research upgraded Kemper Corp. (KMPR) by a notch to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Kemper has been riding on a strong growth momentum ahead of its fourth-quarter and full-year 2013 results, which are slated to release after the closing bell on Feb 6, 2014. The growth impetus stems from improved core fundamentals in 2013, driven by diversified product mix along with lower insurance and operating expenses. Lower catastrophes losses have also supported the improvement in underwriting efficiencies.
Alongside, favorable market trends should help mitigate risks on investments, thereby generating improved returns. The company’s efforts to strengthen its catastrophe risk management and reserves further boosts its growth prospects. These factors along with an incremental return of capital are deemed impressive by investors and ratings agencies.
Kemper has performed equally well with the comparable one-year S&P 500 index, which posted an increase of 24.1% against a return of 24.2% clocked by the company. Additionally, this multi-line insurer delivered positive earnings surprise of 56.8% in its last reported quarter.
On Oct 31, Kemper reported third-quarter 2013 operating earnings per share of 69 cents, which outpaced both the Zacks Consensus Estimate of 44 cents and the year-ago quarter number of 42 cents. Robust increase in operating incomes across most segments more than offset the minor shortfall in the Life and Health segment.
Kemper has been experiencing rising earnings estimates following its robust third-quarter 2013 results. The Zacks Consensus Estimate for 2013 moved north by 6.4% to $2.50 per share in the last 60 days. Earnings per share for 2013 is also projected to surge over 174% over 2012.
Moreover, the Zacks Consensus Estimate for 2014 earnings rose 0.8% to $2.47 over the same 60-day period. No downward revision in estimates was witnessed for both the years.
Other Stocks to Consider
Other top-ranked insurers in the industry include American International Group Inc. (AIG), CNO Financial Group Inc. (CNO) and White Mountains Insurance Group (WTM). All these stocks carry the same Zacks Rank as Kemper.