Stewart Information Services (NYSE:STC) and Kemper (NYSE:KMPR) Financial Contrast

Kemper (NYSE:KMPR) and Stewart Information Services (NYSE:STC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Volatility and Risk

Kemper has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500.

Valuation & Earnings

This table compares Kemper and Stewart Information Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kemper	$4.79 billion	0.35	$143.30 million	($8.40)	-3.42
Stewart Information Services	$2.92 billion	0.46	$115.54 million	$4.56	9.65

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

Insider & Institutional Ownership

86.2% of Kemper shares are held by institutional investors. Comparatively, 96.9% of Stewart Information Services shares are held by institutional investors. 0.6% of Kemper shares are held by company insiders. Comparatively, 2.9% of Stewart Information Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Kemper and Stewart Information Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kemper	4	2	2	0	1.75
Stewart Information Services	1	2	4	0	2.43

Kemper presently has a consensus target price of $37.67, suggesting a potential upside of 31.10%. Stewart Information Services has a consensus target price of $80.25, suggesting a potential upside of 82.35%. Given Stewart Information Services’ stronger consensus rating and higher probable upside, analysts clearly believe Stewart Information Services is more favorable than Kemper.

Dividends

Kemper pays an annual dividend of $1.28 per share and has a dividend yield of 4.5%. Stewart Information Services pays an annual dividend of $2.20 per share and has a dividend yield of 5.0%. Kemper pays out -15.2% of its earnings in the form of a dividend. Stewart Information Services pays out 48.2% 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 increased its dividend for 1 consecutive years and Stewart Information Services has increased its dividend for 4 consecutive years. Stewart Information Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Kemper and Stewart Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kemper	-10.84%	2.89%	0.60%
Stewart Information Services	3.58%	9.39%	4.77%

Summary

Stewart Information Services beats Kemper on 13 of the 17 factors compared between the two stocks.

About Kemper

Kemper Corporation, a diversified insurance holding company, engages in the provision of insurance products to individuals and businesses in the United States. The company operates through three segments: Specialty Property & Casualty Insurance, Preferred Property & Casualty Insurance, and Life & Health Insurance. It provides preferred and specialty 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; and supplemental accident and health insurance products, such as 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.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.