Critical Review: Fidelis Insurance (NYSE:FIHL) versus Kemper (NYSE:KMPR)

Fidelis Insurance (NYSE:FIHL) and Kemper (NYSE:KMPR) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Insider & Institutional Ownership

82.0% of Fidelis Insurance shares are owned by institutional investors. Comparatively, 86.2% of Kemper shares are owned by institutional investors. 6.2% of Kemper shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Fidelis Insurance and Kemper’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelis Insurance	$3.60 billion	0.64	$2.13 billion	$19.07	1.02
Kemper	$4.94 billion	0.75	-$272.10 million	($4.25)	-13.51

Fidelis Insurance has higher earnings, but lower revenue than Kemper. Kemper is trading at a lower price-to-earnings ratio than Fidelis Insurance, indicating that it is currently the more affordable of the two stocks.

Dividends

Fidelis Insurance pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. Kemper pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. Fidelis Insurance pays out 2.1% of its earnings in the form of a dividend. Kemper pays out -29.2% 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 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Fidelis Insurance and Kemper, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelis Insurance	0	4	4	0	2.50
Kemper	0	0	4	1	3.20

Fidelis Insurance currently has a consensus price target of $18.44, suggesting a potential downside of 5.30%. Kemper has a consensus price target of $70.40, suggesting a potential upside of 22.58%. Given Kemper’s stronger consensus rating and higher probable upside, analysts plainly believe Kemper is more favorable than Fidelis Insurance.

Profitability

This table compares Fidelis Insurance and Kemper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fidelis Insurance	59.30%	20.23%	4.22%
Kemper	-5.50%	-2.37%	-0.46%

Summary

Kemper beats Fidelis Insurance on 9 of the 14 factors compared between the two stocks.

About Fidelis Insurance

Fidelis Insurance Holdings Limited, together with its subsidiaries, provides insurance and reinsurance products in Bermuda, the Republic of Ireland, and the United Kingdom. It operates in three segments: Specialty, Reinsurance, and Bespoke segments. The Specialty segment offers aviation and aerospace, energy, marine, property direct and facultative, and other specialty risk solutions. The Reinsurance segment provides property, retrocession, and whole account reinsurance solutions. The Bespoke segment offers customized risk solutions for clients that include credit and political risk, and other risk transfer opportunities, including political violence and terrorism, limited cyber reinsurance, tax liabilities, title, transactional liabilities, and other bespoke solutions. Fidelis Insurance Holdings Limited was incorporated in 2014 and is headquartered in Pembroke, Bermuda.

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.