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Why You Should Add Cincinnati Financial (CINF) to Your Kitty
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Cincinnati Financial Corporation’s (CINF - Free Report) agent-centered business model, improving premium, industry-leading margins, solid capital position and effective capital deployment along with favorable growth estimates make it a good investment choice.
CINF has decent surprise history, having surpassed estimates in the last five quarters.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #2 (Buy). Year to date, the stock has rallied 18.3%, outperforming the industry’s increase of 14.4% and in contrast to the Finance sector’s decrease of 1.4%. The Zacks S&P 500 composite has lost 5% over the same period.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Cincinnati Financial’s ROE for the trailing 12 months is 8.7%, comparing favorably with the industry’s 5.9%, reflecting the company’s efficiency in utilizing shareholders’ fund.
Business Tailwinds
Solid performing Commercial Lines and Personal Lines segments poised CINF for long-term growth.
The company is one of the top 25 U.S. P&C insurers. Cincinnati Financial’s premium growth outperforms the industry average. The appointment of a new agency, expansion of marketing and service capabilities with a focus on high net worth clients and reinsurance assumed through Cincinnati Re to diversify risk should continue to drive premium improvement.
Predictive analytics to improve pricing precision while leveraging local relationships with its agents bodes well for growth.
Prudent underwriting helps Cincinnati Financial deliver improved profitability. CINF targets a 95% to 100% combined ratio over the long term.
The company targets a value creation ratio of 10% to 13% over the next five years. Sustained solid operational performance should help it achieve the target.
Cincinnati Financial has a solid balance sheet with high liquidity and low leverage. The insurer boasts 33 years of favorable reserve development.
The Zacks Consensus Estimate for 2023 earnings implies a year-over-year rise of 3.6% and has moved 5.5% north in the past 60 days.
Impressive Dividend History
Banking on operational excellence, the insurer has a stellar track record of hiking dividends for 61 straight years as well as paying special dividends. CINF increased dividends at an eight-year CAGR (2015-2022) of 5.2%. Its current dividend yield of 2.1% is higher than the industry average of 0.3%
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 14.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 39.6%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past 60 days.
Berkshire’s earnings surpassed estimates in three of the last four quarters, missed in one, the average beat being 11.86%. In the past year, BRK.B has rallied 37.3%.
The Zacks Consensus Estimate for Berkshire’s 2022 earnings has moved 2.3% north, in the past 30 days.
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Why You Should Add Cincinnati Financial (CINF) to Your Kitty
Cincinnati Financial Corporation’s (CINF - Free Report) agent-centered business model, improving premium, industry-leading margins, solid capital position and effective capital deployment along with favorable growth estimates make it a good investment choice.
CINF has decent surprise history, having surpassed estimates in the last five quarters.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #2 (Buy). Year to date, the stock has rallied 18.3%, outperforming the industry’s increase of 14.4% and in contrast to the Finance sector’s decrease of 1.4%. The Zacks S&P 500 composite has lost 5% over the same period.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Cincinnati Financial’s ROE for the trailing 12 months is 8.7%, comparing favorably with the industry’s 5.9%, reflecting the company’s efficiency in utilizing shareholders’ fund.
Business Tailwinds
Solid performing Commercial Lines and Personal Lines segments poised CINF for long-term growth.
The company is one of the top 25 U.S. P&C insurers. Cincinnati Financial’s premium growth outperforms the industry average. The appointment of a new agency, expansion of marketing and service capabilities with a focus on high net worth clients and reinsurance assumed through Cincinnati Re to diversify risk should continue to drive premium improvement.
Predictive analytics to improve pricing precision while leveraging local relationships with its agents bodes well for growth.
Prudent underwriting helps Cincinnati Financial deliver improved profitability. CINF targets a 95% to 100% combined ratio over the long term.
The company targets a value creation ratio of 10% to 13% over the next five years. Sustained solid operational performance should help it achieve the target.
Cincinnati Financial has a solid balance sheet with high liquidity and low leverage. The insurer boasts 33 years of favorable reserve development.
The Zacks Consensus Estimate for 2023 earnings implies a year-over-year rise of 3.6% and has moved 5.5% north in the past 60 days.
Impressive Dividend History
Banking on operational excellence, the insurer has a stellar track record of hiking dividends for 61 straight years as well as paying special dividends. CINF increased dividends at an eight-year CAGR (2015-2022) of 5.2%. Its current dividend yield of 2.1% is higher than the industry average of 0.3%
Other Stocks to Consider
Some other top-ranked stocks from the finance sector are United Fire Group, Inc. (UFCS - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Berkshire Hathaway Inc. (BRK.B - Free Report) . United Fire and Kinsale Capital currently sports a Zacks Rank #1 (Strong Buy), Berkshire carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 14.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 39.6%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past 60 days.
Berkshire’s earnings surpassed estimates in three of the last four quarters, missed in one, the average beat being 11.86%. In the past year, BRK.B has rallied 37.3%.
The Zacks Consensus Estimate for Berkshire’s 2022 earnings has moved 2.3% north, in the past 30 days.