Critical Analysis: Kemper Corporation (KMPR) and Hartford Financial Services Group, Inc. (The) (NYSE:HIG)

Kemper Corporation (NYSE: KMPR) and Hartford Financial Services Group, Inc. (The) (NYSE:HIG) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Kemper Corporation and Hartford Financial Services Group, Inc. (The)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kemper Corporation $2.62 billion 0.95 $169.90 million $0.98 49.59
Hartford Financial Services Group, Inc. (The) $18.55 billion 1.10 $1.28 billion $1.79 31.31

Hartford Financial Services Group, Inc. (The) has higher revenue and earnings than Kemper Corporation. Hartford Financial Services Group, Inc. (The) is trading at a lower price-to-earnings ratio than Kemper Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Kemper Corporation pays an annual dividend of $0.96 per share and has a dividend yield of 2.0%. Hartford Financial Services Group, Inc. (The) pays an annual dividend of $0.92 per share and has a dividend yield of 1.6%. Kemper Corporation pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hartford Financial Services Group, Inc. (The) pays out 51.4% of its earnings in the form of a dividend. Kemper Corporation has raised its dividend for 4 consecutive years. Kemper Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

55.1% of Kemper Corporation shares are held by institutional investors. Comparatively, 90.9% of Hartford Financial Services Group, Inc. (The) shares are held by institutional investors. 0.9% of Kemper Corporation shares are held by company insiders. Comparatively, 1.2% of Hartford Financial Services Group, Inc. (The) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Kemper Corporation and Hartford Financial Services Group, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kemper Corporation 1.95% 1.26% 0.31%
Hartford Financial Services Group, Inc. (The) 3.73% 9.13% 0.71%

Analyst Recommendations

This is a summary of recent recommendations for Kemper Corporation and Hartford Financial Services Group, Inc. (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kemper Corporation 0 2 0 1 2.67
Hartford Financial Services Group, Inc. (The) 0 4 5 0 2.56

Kemper Corporation presently has a consensus target price of $55.00, suggesting a potential upside of 13.17%. Hartford Financial Services Group, Inc. (The) has a consensus target price of $55.38, suggesting a potential downside of 1.19%. Given Kemper Corporation’s stronger consensus rating and higher probable upside, equities analysts plainly believe Kemper Corporation is more favorable than Hartford Financial Services Group, Inc. (The).

Risk & Volatility

Kemper Corporation has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Hartford Financial Services Group, Inc. (The) has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Summary

Hartford Financial Services Group, Inc. (The) beats Kemper Corporation on 11 of the 18 factors compared between the two stocks.

Kemper Corporation Company Profile

Kemper Corporation (Kemper) is a diversified insurance holding company. The Company, through its subsidiaries, provides automobile, homeowners, life, health and other insurance products to individuals and businesses. The Company operates through two segments: Property & Casualty Insurance, and Life & Health Insurance. The Property & Casualty Insurance segment’s products include personal automobile insurance, both preferred and nonstandard, homeowners insurance, other personal insurance and commercial automobile insurance. These products are distributed primarily through independent agents and brokers. The Life & Health Insurance segment’s products are individual life, accident, health and property insurance. These products are distributed by career agents employed by the Company and independent agents and brokers.

Hartford Financial Services Group, Inc. (The) Company Profile

The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries. The Company’s segments include Commercial Lines, which provides workers’ compensation, property, automobile, marine, livestock, liability and umbrella coverages primarily throughout the United States; Personal Lines, which provides automobile, homeowners and personal umbrella coverages to individuals across the United States; Group Benefits, which provides group life, accident and disability coverage, and other products and services; Property & Casualty Other Operations, which includes certain property and casualty operations; Mutual Funds, which provides investment management, administration, product distribution and related services to investors; Talcott Resolution, which consists of the run-off of the Company’s the United States individual and institutional annuity, and Private Placement Life Insurance (PPLI) businesses, and Corporate.

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