Should You Invest in Kemper (KMPR) Stock After Earnings?

Kemper Corp. (NYSE: KMPR) faced quite a few headwinds at the beginning of the decade. 

Since then, however, the business embarked on a course-correction, exiting segments like auto insurance to double down on more profitable ventures. 

It would seem that the shift is beginning to pay off.

On February 5, Kemper Corp held its Q4 2024 earnings call. Earnings per share (EPS) came in at $1.78, ahead of consensus estimates which were pegged at $1.34. This also marked the third consecutive quarter in which the business posted a double beat.

What about those California wildfires that have wreaked havoc on thousands of homes — and provided major challenges for insurers? Despite some initial investor concerns, the company’s preliminary estimates as shared in the recent earnings call point to losses amounting to less than $1 million. 

At the time of writing, KMPR shares were changing hands at a price of $66.33 — some 16.26% higher than one year ago. (See the latest price for KMPR here)

Kemper Corp stock carries an overall Zen Rating of A, equivalent to a Strong Buy. Stocks with this distinction have provided an average annual return of 32.52% over the course of the past 20 years or so.

KMPR also ranks as the 5th top stock in the entire property & casualty insurance industry — which itself carries an industry rating of A.

To get a better sense of why Kemper Corp stock merits such a high rating, we need to take a closer look at the 7 Component Grade ratings that constitute an overall Zen rating.

Our proprietary quant rating system identified 3 areas of strength — Growth, Sentiment, and Momentum. In these categories, KMPR ranks in the 89th, 85th, and 82nd percentile, respectively, of the approximately 4,600 stocks that we track.

However, there’s an interesting recent development that is steering toward improvement in the company’s balance sheet. 

On February 12, the company announced that it had redeemed $450 million in 4.35% senior notes due 2025 using its cash reserves. 

Although the business is still highly leveraged, this latest development is a positive sign that the stock’s high debt-to-equity (D/E) ratio of 3.54 can be ameliorated going forward.

We’d also be remiss not to mention some promising signs when it comes to KMPR’s Value rating. At a price-to-earnings (P/E) of just 13.4x, below the market average of 40.54x and the industry average of 15.11x, the stock is by no means expensive. 

Once we factor in growth prospects through the pretty appealing 0.76 price to earnings growth (PEG) ratio, the attractive valuation is all the more clear.

The insurance business’s earnings are forecast to grow at 21.77% per year — while the industry average forecast currently stands at -2.46%. Revenues, on the other hand, are expected to increase by 11.82% per year — ahead of the industry average estimate of 10.79%.

KMPR might also be of interest to dividend investors. The business has consistently raised dividends for the past 10 years — the latest increase was announced in the earnings call, with a 3.1% hike that brought payments up to $0.32 per share.

—> Click here to research KMPR. If you’d like a shortlist of stocks that our quant system rates highly, check out our Best “A” Zen-Rated Stocks To Buy Today screener

What to Do Next?

• 8 Stock Lists You Need Now >
• See All “A” Rated Stocks with +32.52% Average Annual Return > 
• 4 Step Process to Find More 100%+ Stock Winners >

Want to get in touch? Email us at news@wallstreetzen.com.