Cincinnati Financial Corporation’s (CINF - Free Report) higher level of insured exposures, rate increase, agent-focused business model, consistent cash flow and a solid capital position make it worth adding to one’s portfolio.
Its earnings surpassed estimates in the three reported quarters of 2023. Its earnings rose 6.8% in the last five years.
Cincinnati Financial has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum. The insurer targets an average value creation ratio of 10% to 13% over the next five-year period.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #2 (Buy). In the past month, the stock has gained 4.8% compared with the industry’s growth of 1.3%.
Optimistic Growth Projections
The Zacks Consensus Estimate for 2024 earnings stands at $6.06, suggesting an increase of 8.4% on 7.3% higher revenues of $9.5 billion.
The long-term earnings growth rate is currently pegged at 18.2%, better than the industry average of 12.3%.
We expect 2025 bottom line to witness a three-year CAGR of 8.7%.
Business Drivers
Cincinnati Financial continues to grow its premiums through a disciplined expansion of Cincinnati Re. Better pricing, an agent-centric model and a higher level of insured exposures also drive net written premiums. We expect 2025 net earned premiums to witness a three-year CAGR of 7.5%. CINF boasts above-average industry premium growth.
The Excess and Surplus line has been performing well since its inception in 2008. New business written premiums, higher renewal written premiums and higher average renewal estimated pricing are likely to boost the performance of this segment. Technology and data are also being used to identify new exposures in emerging businesses.
Cincinnati Financial has been witnessing an increase in net investment income attributable to a rise in interest income from fixed-maturity securities and a decrease in equity portfolio dividends. Given the fact that insurers are beneficiaries of an improved rate environment, net investment income is poised to rise.
Given the nature of business, the insurer is exposed to catastrophe losses, which weigh on profitability. Nonetheless, banking on prudent underwriting, CINF’s solid track record of 34 years of favorable reserve development is appreciable. It also has a reinsurance program to limit insured loss.
CINF has a solid capital management policy in place. The insurer boasts a track of 63 straight years of dividend hikes, reflecting operational expertise, the board's positive outlook and confidence in outstanding capital, liquidity and financial flexibility. Its dividend yield of 2.8% is better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors.
It has a Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the same space are CNA Financial (CNA - Free Report) , The Progressive Corporation (PGR - Free Report) and W.R. Berkley Corporation (WRB - Free Report) , each sporting a Zacks Rank #1 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNA Financial delivered a trailing four-quarter average earnings surprise of 9.24%. The stock has lost 1.4% year to date.
The Zacks Consensus Estimate for CNA’s 2024 earnings indicates a 7.4% year-over-year increase. The expected long-term earnings growth rate is 5%. The consensus estimate for 2024 has moved higher 1.1% in the past 30 days.
Progressive delivered an earnings surprise in two of the last four reported quarters while missing in the other two. Year to date, the stock has gained 26.3%.
The Zacks Consensus Estimate for PGR’s 2024 earnings indicates a 49% year-over-year increase. The expected long-term earnings growth rate is 25.8%. The consensus estimate for PGR’s 2024 earnings has moved up 2.9% in the past 30 days.
W.R. Berkley delivered a trailing four-quarter average earnings surprise of 4.35%. Year to date, the stock has gained 0.9%.
The Zacks Consensus Estimate for WRB’s 2024 earnings implies a year-over-year rise of 20.2%. The consensus estimate has moved up 0.9% in the past 30 days.
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Cincinnati Financial Corporation’s (CINF - Free Report) higher level of insured exposures, rate increase, agent-focused business model, consistent cash flow and a solid capital position make it worth adding to one’s portfolio.
Its earnings surpassed estimates in the three reported quarters of 2023. Its earnings rose 6.8% in the last five years.
Cincinnati Financial has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum. The insurer targets an average value creation ratio of 10% to 13% over the next five-year period.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #2 (Buy). In the past month, the stock has gained 4.8% compared with the industry’s growth of 1.3%.
Optimistic Growth Projections
The Zacks Consensus Estimate for 2024 earnings stands at $6.06, suggesting an increase of 8.4% on 7.3% higher revenues of $9.5 billion.
The long-term earnings growth rate is currently pegged at 18.2%, better than the industry average of 12.3%.
We expect 2025 bottom line to witness a three-year CAGR of 8.7%.
Business Drivers
Cincinnati Financial continues to grow its premiums through a disciplined expansion of Cincinnati Re. Better pricing, an agent-centric model and a higher level of insured exposures also drive net written premiums. We expect 2025 net earned premiums to witness a three-year CAGR of 7.5%. CINF boasts above-average industry premium growth.
The Excess and Surplus line has been performing well since its inception in 2008. New business written premiums, higher renewal written premiums and higher average renewal estimated pricing are likely to boost the performance of this segment. Technology and data are also being used to identify new exposures in emerging businesses.
Cincinnati Financial has been witnessing an increase in net investment income attributable to a rise in interest income from fixed-maturity securities and a decrease in equity portfolio dividends. Given the fact that insurers are beneficiaries of an improved rate environment, net investment income is poised to rise.
Given the nature of business, the insurer is exposed to catastrophe losses, which weigh on profitability. Nonetheless, banking on prudent underwriting, CINF’s solid track record of 34 years of favorable reserve development is appreciable. It also has a reinsurance program to limit insured loss.
CINF has a solid capital management policy in place. The insurer boasts a track of 63 straight years of dividend hikes, reflecting operational expertise, the board's positive outlook and confidence in outstanding capital, liquidity and financial flexibility. Its dividend yield of 2.8% is better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors.
It has a Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the same space are CNA Financial (CNA - Free Report) , The Progressive Corporation (PGR - Free Report) and W.R. Berkley Corporation (WRB - Free Report) , each sporting a Zacks Rank #1 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNA Financial delivered a trailing four-quarter average earnings surprise of 9.24%. The stock has lost 1.4% year to date.
The Zacks Consensus Estimate for CNA’s 2024 earnings indicates a 7.4% year-over-year increase. The expected long-term earnings growth rate is 5%. The consensus estimate for 2024 has moved higher 1.1% in the past 30 days.
Progressive delivered an earnings surprise in two of the last four reported quarters while missing in the other two. Year to date, the stock has gained 26.3%.
The Zacks Consensus Estimate for PGR’s 2024 earnings indicates a 49% year-over-year increase. The expected long-term earnings growth rate is 25.8%. The consensus estimate for PGR’s 2024 earnings has moved up 2.9% in the past 30 days.
W.R. Berkley delivered a trailing four-quarter average earnings surprise of 4.35%. Year to date, the stock has gained 0.9%.
The Zacks Consensus Estimate for WRB’s 2024 earnings implies a year-over-year rise of 20.2%. The consensus estimate has moved up 0.9% in the past 30 days.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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