On Apr 5, 2013, Zacks Investment Research upgraded Cincinnati Financial Corp. (CINF - Analyst Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Cincinnati Financial has delivered positive earnings surprises in all 4 quarters of 2012 with an average beat of 64.01%. Moreover, the Zacks Consensus Estimate for the first quarter for 2013 stands at 52 cents per share, up 7.64% year over year. Most estimates were revised upward over the past 60 days.
This property and casualty insurance company is expected to declare its first-quarter earnings after the closing bell on Apr 25. Cincinnati Financial’s Commercial Lines Insurance segment has been witnessing top-line growth for the past couple of years driven by several growth initiatives as well as a gradual increase in insurance rates. The momentum is expected to continue going forward.
Cincinnati Financial’s Excess and Surplus line is also performing well. Appointing new agencies is another strategic initiative that the company is focused on for 2013. During 2013, it plans to appoint around 65 agencies, which according to management, can plough in $5 billion of direct written premium by 2015.
Additionally, Cincinnati Financial regularly returns capital to shareholders in the form of cash dividend. The dividend yield of 3.43% is higher than the industry average of 2.2%. Management has been consistently increasing the yearly dividend for the past 52 years.
Other Stocks to Consider
Other stocks in the property and casualty insurance sector that are worth a look are Arch Capital Group Ltd. (ACGL - Snapshot Report), Aspen Insurance Holdings Ltd. (AHL - Snapshot Report) and AXIS Capital Holdings Limited (AXS - Analyst Report). All these are Zacks Rank #1 (Strong Buy) companies.