Critical Review: James River Group (NASDAQ:JRVR) & Kemper (NYSE:KMPR)

James River Group (NASDAQ:JRVRGet Rating) and Kemper (NYSE:KMPRGet Rating) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Dividends

James River Group pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. Kemper pays an annual dividend of $1.24 per share and has a dividend yield of 2.4%. James River Group pays out -12.7% of its earnings in the form of a dividend. Kemper pays out -23.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Kemper has raised its dividend for 3 consecutive years. Kemper is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for James River Group and Kemper, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James River Group 0 1 3 0 2.75
Kemper 1 2 0 0 1.67

James River Group presently has a consensus target price of $30.80, suggesting a potential upside of 21.45%. Kemper has a consensus target price of $61.33, suggesting a potential upside of 19.00%. Given James River Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe James River Group is more favorable than Kemper.

Earnings and Valuation

This table compares James River Group and Kemper’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
James River Group $772.88 million 1.23 -$172.80 million ($1.57) -16.15
Kemper $5.79 billion 0.57 -$120.50 million ($5.30) -9.71

Kemper has higher revenue and earnings than James River Group. James River Group is trading at a lower price-to-earnings ratio than Kemper, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

98.8% of James River Group shares are owned by institutional investors. Comparatively, 80.8% of Kemper shares are owned by institutional investors. 2.8% of James River Group shares are owned by company insiders. Comparatively, 0.7% of Kemper shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares James River Group and Kemper’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James River Group -7.47% -7.97% -1.19%
Kemper -5.79% -9.23% -2.46%

Volatility and Risk

James River Group has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500. Comparatively, Kemper has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Summary

James River Group beats Kemper on 9 of the 17 factors compared between the two stocks.

About James River Group (Get Rating)

James River Group Holdings, Ltd., through its subsidiaries, provides specialty insurance and reinsurance services in the United States. It operates through Excess and Surplus Lines, Specialty Admitted Insurance, and Casualty Reinsurance segments. The Excess and Surplus Lines segment underwrites liability and property insurance on an excess and surplus commercial lines basis in all states and the District of Columbia. This segment distributes its insurance policies primarily through wholesale insurance brokers. The Specialty Admitted Insurance segment provides workers' compensation coverage for building trades, healthcare employees, goods and services, light manufacturing, specialty transportation, and agriculture, as well as fronting and program business. The Casualty Reinsurance segment offers proportional and working layer casualty reinsurance to third parties and other insurance companies. James River Group Holdings, Ltd. was founded in 2002 and is headquartered in Pembroke, Bermuda.

About Kemper (Get Rating)

Kemper Corporation, a diversified insurance holding company, provides property and casualty, and life and health insurance in the United States. The company operates through three segments: Specialty Property & Casualty Insurance, Preferred Property & Casualty Insurance, and Life & Health Insurance. It provides automobile, homeowners, renters, fire, umbrella, general liability, and various other property and casualty insurance to individuals, as well as commercial automobile insurance to businesses. The company also offers life insurance, including permanent and term insurance, as well as supplemental accident and health insurance products; and Medicare supplement insurance, fixed hospital indemnity, home health care, specified disease, and accident-only plans to individuals in rural, suburban, and urban areas. It distributes its products through independent agents and brokers. The company was formerly known as Unitrin, Inc. and changed its name to Kemper Corporation in August 2011. Kemper Corporation was incorporated in 1990 and is headquartered in Chicago, Illinois.

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