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Why You Should Add Kemper (KMPR) Stock to Your Portfolio

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Kemper Corporation (KMPR - Free Report) is poised for growth given a compelling product portfolio and solid capital position. The stock carries a favorable VGM Score of B. VGM Score reflects combined weighted styles, helping to identify those with the most attractive value, best growth, and most promising momentum. Back-tested results show that stocks with a favorable Style Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) are best investment options.

The company’s return on equity of 12.8% is higher than 8.3% for the industry, reflecting the company’s tactical efficiency in using shareholder funds.

This company has a stellar history of delivering positive surprise in each of the last 14 quarters, which reflects operational excellence.

The insurer has been increasing its revenues over the last several years driven by higher premiums earned and investment income. The momentum is expected to continue given the company’s focus on sharpening core capabilities, targeting niche market and diversifying global presence. The company continues to expect growth and momentum in specialty auto business.

The company’s Specialty Property and Casualty Insurance Segment remains strong given solid margins and global expansion. At its Preferred Property and Casualty Insurance Segment, the focus is on repositioning the business to improve profitability. Its Life and Health Insurance segment continues to provide diversified cash flow generation.

The company has an active catastrophe reinsurance program to lower volatility from high frequency and low severity events to limit loss from catastrophes.

This Zacks Rank #2 insurer has a strong balance sheet with significant financial flexibility. As on Mar 31, 2020, the company had $871 million of available committed contingent liquidity, no near-term debt maturities and a diversified investment portfolio. Its debt to capital ratio of 17.1 compares favorably with industry average of 30.3.

Given its sustained operational performance, the company enjoys strong ratings from credit rating agencies. During the first quarter of 2020, S&P upgraded the company’s key financial strength rating to A and the holding company's senior debt ratings to BBB.

The stock has seen its estimates for 2020 and 2021 move up nearly 2% and 0.9%, respectively in the past 30 days, reflecting investor optimism.

Shares of Kemper have lost 19.4% year to date compared with the industry’s decline of 30.8%. Solid fundamentals like compelling product portfolio and strong liquidity position should continue to drive the stock going forward.


 

The stock has a Value Score of A. Value Score helps identify companies that are undervalued.

Other Stocks to Consider

Some other top-ranked stocks in the insurance space include National General Holdings Corp , Allstate Corporation (ALL - Free Report) and Progressive Corporation (PGR - Free Report) .

National General, a specialty personal lines insurance holding company, provides various insurance products and services in the United States, Bermuda, Luxembourg and Sweden. Its earnings beat estimates in two of the last four quarters, the average positive surprise being 5.68%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allstate provides property and casualty, and other insurance products in the United States and Canada. The company surpassed estimates in each of the last four quarters, the average positive surprise being 18.45%.The stock carries a Zacks Rank #2.

Progressive provides personal and commercial auto insurance, residential property insurance, and other specialty property-casualty insurance and related services primarily in the United States. The company surpassed estimates in three of the last four quarters, the average positive surprise being 15.58%.The stock carries a Zacks Rank #2.

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