Kemper Downgraded to Strong Sell - Analyst Blog

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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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AGO , AIZ , CI , KMPR

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