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Cincinnati Financial

CINF

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Cincinnati Financial Corp. (CINF - Analyst Report) touched its 52-week high of $40.70 on October 26; a day after this property casualty insurance writer reported stellar third-quarter results that included a 56.1% earnings surprise. With four straight quarters of positive earnings surprises and a year-to-date return of 30.8%, this Zacks #1 Rank (Strong Buy) appears to have solid momentum moving forward.

Third Quarter

On October 25, Cincinnati Financial delivered third quarter earnings of 64 cents per share, surging past the Zacks Consensus Estimate of 23 cents and jumping nearly fourfold over last year. The quarter benefited from strong property casualty underwriting.

Revenue stood at $1.04 billion, up 10.0% year over year and inching past the Zacks Consensus Estimate by 0.6%. The increase in total revenue was primarily led by higher premiums earned.

Investment income came in at $132 million, climbing 2% from the prior-year quarter.

Total benefits and expenses decreased 5.4% year over year to $883 million due to lower insurance loss and benefits.

Cincinnati Financial’s board of directors approved a 1.2% increase in the fourth-quarter dividend to 40.75 cents per share. This marks the 52nd consecutive year with an annual dividend increase.

Earnings Estimates Moving North

The Zacks Consensus Estimate for 2012 is up 9.2% to $1.67 in the past 7 days, as 6 estimates out of 7 were revised higher. This represents a year-over-year increase of 153.3%.

Market Performance & Technicals

Cincinnati Financial has been trading above its 50-day and 200-day moving averages since its third quarter earnings release.

Volume is fairly strong, averaging roughly 742,989 daily. The year-to-date return for the stock came in at 30.8%, way ahead of the NASDAQ’s return of 11.3%.

Headquartered in Fairfield, Ohio, and founded in 1950, Cincinnati Financial Corporation markets property and casualty insurance as its main business in the United States. It also offers commercial leasing and financing services. With a market capitalization of $6.41 billion and 4,067 employees, Cincinnati Financial closely competes with American Financial Group Inc. (AFG) and Progressive Corp. (PGR), among others.


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