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Should Cincinnati Financial (CINF) Stock be in Your Portfolio?

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Shares of Cincinnati Financial Corporation (CINF - Free Report) gained 27.70% in the last one year, outperforming the Zacks categorized Property and Casualty industry’s growth of 23.56%. The insurer also witnessed its full-year 2017 estimates moving north in the last two months. We expect the company to retain its momentum on the back of a number of positives.

The P&C insurer’s Commercial Lines Property Casualty Insurance segment has been displaying continued increase in revenues over the last few quarters. This is owing to several growth initiatives undertaken and a gradual rise in insurance rates. The company anticipates moderate top-line growth in the future, primarily due to improved pricing.

Cincinnati Financial has been appointing new agencies and expanding product offerings to ramp up its business. In fact, the company had plans to appoint about 100 agencies in 2016. These agencies will open up opportunities for the company, which in turn, will help to expand the insurer’s market share and drive long-term growth. In addition, agencies focusing on high net worth personal lines clients have been contributing to the company’s high net worth new business written premiums.

Further, a robust liquidity position, backed by consistent cash flow generation, low leverage and prudent capital management, should continue to drive growth for Cincinnati Financial.

Cincinnati Financial is set to report fourth-quarter results on Feb 8.  However, our proven model does not conclusively show that the company is poised for an earnings beat this season. Though the company carries a Zacks Rank #1 (Strong Buy), which increases the predictive power of an earnings beat, its Earnings ESP of 0.00% makes surprise prediction difficult. We note that the P&C insurer delivered positive surprises in all of the last four quarters with an average beat of 11.82%.

Other Stocks to Consider

Other well-ranked stocks from the insurance industry include Aspen Insurance Holdings Limited , CNA Financial Corporation (CNA - Free Report) and Mercury General Corporation (MCY - Free Report) . All of these stocks have the same Zacks Rank as Cincinnati Financial. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aspen Insurance Holdings deals in insurance and reinsurance businesses worldwide. The company delivered positive surprise in one of the last four quarters, but with an average miss of 15.48%.

CNA Financial offers commercial property and casualty insurance products primarily in the United States. The company delivered positive surprises in three of the last four quarters, but with an average miss of 18.69%.

Mercury General deals in writing personal automobile insurance in the U.S. The company delivered positive surprises in two of the last four quarters, but with an average miss of 21.04%.

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