KMPR
Kemper Corporation
$26.95
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 13.3% below fair value
You pay
$26.95
Bear
$21.18
Fair
$31.10
Bull
$37.05
Bear
$21.18
-21.4%
ROTCE 13.9% → 1.61x TBV
Fair
$31.10
+15.4%
ROTCE 18.5% → 2.37x TBV
Bull
$37.05
+37.5%
ROTCE 21.3% → 2.82x TBV
Adjust Assumptions
18.5%
10.1%
Key Value Driver
ROTCE (18.5%) vs. cost of equity (10.1%)
Implied Market Multiple
2.05x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$35.50
Divergence from AlphaVal
12%
Summary
With ROTCE of 18.5% vs. 10.1% cost of equity, fair P/TBV is 2.37x on $13.15 tangible book, implying $31.10 per share. DDM cross-check: $13.56.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $13.56 (56% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly