Kansas City Life Insurance Stock Downgraded (KCLI)

NEW YORK ( TheStreet) -- Kansas City Life Insurance (Nasdaq: KCLI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

Highlights from the ratings report include:
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • KANSAS CITY LIFE INS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, KANSAS CITY LIFE INS CO increased its bottom line by earning $2.29 versus $1.95 in the prior year.
  • The gross profit margin for KANSAS CITY LIFE INS CO is rather low; currently it is at 24.90%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, KCLI's net profit margin of 16.20% compares favorably to the industry average.
  • Net operating cash flow has significantly decreased to -$3.74 million or 144.59% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Kansas City Life Insurance Company, together with its subsidiaries, operates as a financial services company that focuses on underwriting, selling, and administrating life and annuity insurance products in the United States. The company has a P/E ratio of nine, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Kansas City Life has a market cap of $364.3 million and is part of the financial sector and insurance industry. Shares are down 3.4% year to date as of the close of trading on Thursday.

You can view the full Kansas City Life Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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