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Moody's Corporation (MCO) - free report >>
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Cincinnati Financial (CINF) Hits 52-Week High on Strong Q1
On Jun 6, 2016, shares of Cincinnati Financial Corp. (CINF - Free Report) hit a 52-week high of $69.81, driven by better-than-expected first-quarter results. About 0.3 million shares exchanged hands in the last trading session and the stock finally closed at $69.39. Year to date, the stock has returned 173%, comparing favorably with -0.8% by the Nasdaq.
What Drove the Stock?
Cincinnati Financial’s operating earnings of 89 cents per share in the first quarter surpassed the Zacks Consensus Estimate by 15.7% and improved 51% year over year. The stellar performance came on the back of solid underwriting results and higher investment income. This Zacks Rank #1 (Strong Buy) property and casualty insurer delivered positive surprises in the last four quarters, with an average beat of 15.4%.
While revenues improved on higher premiums earned and increased investment income, benefits and expenses declined owing to lower insurance losses and contract holders’ benefits. Underwriting results fared well, with combined ratio improving 610 basis points.
Balance sheet strengthened with total assets improving from the 2015 level and debt-to-capital ratio exhibiting an improvement of 40 basis points. Book value per share also increased year over year.
The company also scores strongly with the rating agencies. In May 2016, Moody's Investors Service, a unit of Moody’s Corp. (MCO - Free Report) reiterated the A3 senior debt ratings of Cincinnati Financial and the A1 insurance financial strength (IFS) ratings of Cincinnati Insurance with a stable outlook.
These positives drove the Zacks Consensus Estimate higher on upward revisions in the last 60 days by 7.4% to $2.90 for 2016 and 7.7% to $2.80 for 2017.
Other Stocks to Consider
Investors interested in property and casualty insurers can also consider stocks like Markel Corp. (MKL - Free Report) and National General Holdings Corp. . Both stocks share the Zacks Rank with Cincinnati Financial.
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