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Reasons Why Cincinnati Financial (CINF) is a Solid Pick Now
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Cincinnati Financial Corporation (CINF - Free Report) has been gaining momentum on the back of higher renewal written premiums, higher level of insured exposures, flexible liquidity and low leverage and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for Cincinnati Financial’s 2023 earnings is $5.14, indicating a 21.2% increase from the year-ago reported figure on 7.4% higher revenues of $8.62 billion.
The consensus estimate for 2024 earnings is $5.90, indicating a 14.7% increase from the year-ago reported figure on 8.2% higher revenues of $9.34 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for both 2023 and 2024 earnings has moved 0.1% north in the past 30 days. This should instill investors' confidence in the stock.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #2 (Buy). In the past year, the stock has lost 14.9% compared with the industry’s decline of 8.4%.
Image Source: Zacks Investment Research
Business Tailwinds
Cincinnati Financial is well-poised to grow on the back of solid performance across the Commercial Lines and Personal Lines segments.
Performance of the Personal lines segment is likely to be driven by higher renewal written premiums that benefited from rate increases and a higher level of insured exposures.
Riding on higher earned premiums, driven by renewal written premium growth that continued to include price increases, growth initiatives and a higher level of insured exposures, the Commercial Lines Insurance segment should continue to witness top-line growth.
The insurer continued to use predictive analytics tools to improve pricing precision and segmentation while leveraging local relationships with its agents. It seeks to maintain appropriate pricing discipline for both new and renewal business.
Cincinnati Financial expects property casualty premium growth rate in 2023 to be 8%.
Investment income should continue to rise because of the increase in equity portfolio dividends and increase in interest income from fixed-maturity securities. Moreover, cash flow from operating activities consistently helps the company boost investment income.
Cincinnati Financial has a solid balance sheet with high liquidity and low leverage. Cash flow, a contributor to investment income and interest income, remains strong. CINF boasts 34 years of favorable reserve development.
Cincinnati Financial’s consistent cash flow and sufficient cash balances continue to boost liquidity. In terms of capital management, Cincinnati Financial has returned capital to shareholders through regular cash dividends as well as special dividends, reflecting its strong operating performance and financial flexibility. Its current dividend yield of 2.4% is higher than the industry’s average of 0.3%.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for 2023 has moved 5.4% north in the past 60 days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating year-over-year increase of 29.6% and 11.7%, respectively. In the past year, AXS has gained 1.4%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $46.03 and $53.25, indicating year-over-year increase of 69.9% and 15.7%, respectively. In the past year, RE has gained 26.6%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 35.9%.
The Zacks Consensus Estimate for Kinsale Capital’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating year-over-year increase of 26.4% and 20.2%, respectively.
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Reasons Why Cincinnati Financial (CINF) is a Solid Pick Now
Cincinnati Financial Corporation (CINF - Free Report) has been gaining momentum on the back of higher renewal written premiums, higher level of insured exposures, flexible liquidity and low leverage and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for Cincinnati Financial’s 2023 earnings is $5.14, indicating a 21.2% increase from the year-ago reported figure on 7.4% higher revenues of $8.62 billion.
The consensus estimate for 2024 earnings is $5.90, indicating a 14.7% increase from the year-ago reported figure on 8.2% higher revenues of $9.34 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for both 2023 and 2024 earnings has moved 0.1% north in the past 30 days. This should instill investors' confidence in the stock.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #2 (Buy). In the past year, the stock has lost 14.9% compared with the industry’s decline of 8.4%.
Image Source: Zacks Investment Research
Business Tailwinds
Cincinnati Financial is well-poised to grow on the back of solid performance across the Commercial Lines and Personal Lines segments.
Performance of the Personal lines segment is likely to be driven by higher renewal written premiums that benefited from rate increases and a higher level of insured exposures.
Riding on higher earned premiums, driven by renewal written premium growth that continued to include price increases, growth initiatives and a higher level of insured exposures, the Commercial Lines Insurance segment should continue to witness top-line growth.
The insurer continued to use predictive analytics tools to improve pricing precision and segmentation while leveraging local relationships with its agents. It seeks to maintain appropriate pricing discipline for both new and renewal business.
Cincinnati Financial expects property casualty premium growth rate in 2023 to be 8%.
Investment income should continue to rise because of the increase in equity portfolio dividends and increase in interest income from fixed-maturity securities. Moreover, cash flow from operating activities consistently helps the company boost investment income.
Cincinnati Financial has a solid balance sheet with high liquidity and low leverage. Cash flow, a contributor to investment income and interest income, remains strong. CINF boasts 34 years of favorable reserve development.
Cincinnati Financial’s consistent cash flow and sufficient cash balances continue to boost liquidity. In terms of capital management, Cincinnati Financial has returned capital to shareholders through regular cash dividends as well as special dividends, reflecting its strong operating performance and financial flexibility. Its current dividend yield of 2.4% is higher than the industry’s average of 0.3%.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and Kinsale Capital Group, Inc. (KNSL - Free Report) , each sporting a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for 2023 has moved 5.4% north in the past 60 days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating year-over-year increase of 29.6% and 11.7%, respectively. In the past year, AXS has gained 1.4%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $46.03 and $53.25, indicating year-over-year increase of 69.9% and 15.7%, respectively. In the past year, RE has gained 26.6%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 35.9%.
The Zacks Consensus Estimate for Kinsale Capital’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating year-over-year increase of 26.4% and 20.2%, respectively.