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Here's Why Investors Should Hold Cincinnati Financial (CINF)
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Cincinnati Financial Corporation (CINF - Free Report) has been gaining momentum on the back of price increases, higher renewal written premiums, growth initiatives and improvement in equity portfolio dividends and interest income.
Growth Projections
The Zacks Consensus Estimate for Cincinnati Financial’s 2023 earnings is pegged at $4.51, indicating a 6.3% increase from the year-ago reported figure on 10.2% higher revenues of $8.84 billion.
The consensus estimate for 2024 earnings is pegged at $5.80, indicating a 28.5% increase from the year-ago reported figure on 3.4% higher revenues of $9.14 billion.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 14% against the industry’s increase of 18.1%.
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 the planned expansion of high-net-worth business produced by the agencies, higher renewal written premiums and the extended use of pricing precision tools.
The Commercial Lines business is expected to gain from solid premiums earned, reflecting renewal written premium growth that continued to include higher average pricing and improved level of insured exposures.
Investment income should continue to rise because of the surge in equity portfolio dividends and interest income. Moreover, cash flow from operating activities consistently helps the company boost investment income.
The property and casualty insurer is focused on earning new business through appointment of new agencies from a combination of quality service and expansion of insurance products for clients of those agencies. Agencies, appointed since the beginning of 2022, contributed 5% of total new business written premiums. So far in 2023, the insurer has appointed 66 agencies, including 23 that market only personal lines products.
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 has returned capital to shareholders through regular cash dividends as well as special dividends. In January 2023, the board increased quarterly cash dividend by 9% and this action sets the stage for a 63rd consecutive year of rising dividend payments.
The Zacks Consensus Estimate for 2024 earnings has moved 0.5% north in the past 60 days. This should instill investors' confidence in the stock.
RLI beat estimates in each of the last four quarters, the average being 43.50%. In the past year, the insurer has gained 18.9%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.6% and 10.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
NMI Holdings beat estimates in each of the last four quarters, the average being 5.95%. In the past year, NMIH has rallied 52.6%.
The Zacks Consensus Estimate for NMI Holdings’ 2023 and 2024 earnings per share is pegged at $3.58 and $3.93, indicating a year-over-year increase of 5.6% and 9.5%, respectively.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 41.4%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.
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Here's Why Investors Should Hold Cincinnati Financial (CINF)
Cincinnati Financial Corporation (CINF - Free Report) has been gaining momentum on the back of price increases, higher renewal written premiums, growth initiatives and improvement in equity portfolio dividends and interest income.
Growth Projections
The Zacks Consensus Estimate for Cincinnati Financial’s 2023 earnings is pegged at $4.51, indicating a 6.3% increase from the year-ago reported figure on 10.2% higher revenues of $8.84 billion.
The consensus estimate for 2024 earnings is pegged at $5.80, indicating a 28.5% increase from the year-ago reported figure on 3.4% higher revenues of $9.14 billion.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 14% against the industry’s increase of 18.1%.
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 the planned expansion of high-net-worth business produced by the agencies, higher renewal written premiums and the extended use of pricing precision tools.
The Commercial Lines business is expected to gain from solid premiums earned, reflecting renewal written premium growth that continued to include higher average pricing and improved level of insured exposures.
Investment income should continue to rise because of the surge in equity portfolio dividends and interest income. Moreover, cash flow from operating activities consistently helps the company boost investment income.
The property and casualty insurer is focused on earning new business through appointment of new agencies from a combination of quality service and expansion of insurance products for clients of those agencies. Agencies, appointed since the beginning of 2022, contributed 5% of total new business written premiums. So far in 2023, the insurer has appointed 66 agencies, including 23 that market only personal lines products.
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 has returned capital to shareholders through regular cash dividends as well as special dividends. In January 2023, the board increased quarterly cash dividend by 9% and this action sets the stage for a 63rd consecutive year of rising dividend payments.
The Zacks Consensus Estimate for 2024 earnings has moved 0.5% north in the past 60 days. This should instill investors' confidence in the stock.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are RLI Corp. (RLI - Free Report) , NMI Holdings Inc (NMIH - Free Report) and Root, Inc. (ROOT - Free Report) . While RLI Corp. sports a Zacks Rank #1 (Strong Buy), NMI Holdings and Root carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RLI beat estimates in each of the last four quarters, the average being 43.50%. In the past year, the insurer has gained 18.9%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.6% and 10.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
NMI Holdings beat estimates in each of the last four quarters, the average being 5.95%. In the past year, NMIH has rallied 52.6%.
The Zacks Consensus Estimate for NMI Holdings’ 2023 and 2024 earnings per share is pegged at $3.58 and $3.93, indicating a year-over-year increase of 5.6% and 9.5%, respectively.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 41.4%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.