Kemper Downgraded to Strong Sell - Analyst Blog

By Zacks Equity Research,

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On Mar 19, Zacks Investment Research downgraded Kemper Corporation ( KMPR ) to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

Kemper witnessed sharp downward estimate revisions after reporting disappointing fourth-quarter 2012 results. Shares of this multi-line insurer dipped 1.8% from Feb 8 through Mar 19.

On Feb 7, Kemper reported a fourth-quarter 2012 loss per share of 6 cents, missing the Zacks Consensus Estimate by 250%.

Total revenue slid 2.7% year over year to $596.6 million on lower earned premiums. Planned reductions at Kemper Direct largely induced the lower earned premiums. The expected long-term sales growth is estimated to be negative 3.6%.

Net investment income in the fourth quarter declined 3.2% year over year to $72.9 million, attributable to lower yields on fixed maturity investments and higher investment expenses.

Moreover, total expense increased 3.5% to $602.2 million mostly due to policyholders' benefits and incurred losses and loss adjustment expenses.

Cash balance at the end of the quarter plunged 62% year over year to $96.3 million.

The Zacks Consensus Estimate for 2013 decreased 18.8% to $1.75 per share over the last 60 days as 3 of 4 estimates moved south. For 2014, 2 of 4 estimates were revised downward over the last 60 days, sinking the Zacks Consensus Estimate by 14.1% to $2.13 per share.

Other Stocks to Consider

Not all multi-line insures are performing as poorly as Kemper. Assured Guaranty Ltd . ( AGO ) with Zacks Rank #1 (Strong Buy) and Assurant Inc . ( AIZ ) and Cigna Corp . ( CI ) with Zacks Rank #2 (Buy) are worth considering.

ASSURED GUARNTY (AGO): Free Stock Analysis Report

ASSURANT INC (AIZ): Free Stock Analysis Report

CIGNA CORP (CI): Free Stock Analysis Report

KEMPER CORP (KMPR): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AGO , AIZ , CI , KMPR

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