Kansas City Life Insurance Stock Downgraded (KCLI)

Editor's Note: 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.

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 increase in stock price during the past year, 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.

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Highlights from the ratings report include:
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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 has improved earnings per share by 39.2% 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 $3.59 versus $2.29 in the prior year.
  • The gross profit margin for KANSAS CITY LIFE INS CO is currently extremely low, coming in at 11.40%. Regardless of KCLI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 7.24% trails the industry average.
  • Net operating cash flow has decreased to $13.50 million or 36.38% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
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Kansas City Life Insurance Company, together with its subsidiaries, operates as a financial services company that focuses on underwriting, sale, and administration of life insurance and annuity products in the United States. The company has a P/E ratio of 9.5, below the S&P 500 P/E ratio of 17.7. Kansas City Life has a market cap of $375.2 million and is part of the financial sector and insurance industry. Shares are down 10.9% year to date as of the close of trading on Friday.

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

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