We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Buy Cincinnati Financial (CINF) Stock
Read MoreHide Full Article
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.
The insurer’s earnings have grown 6.8% in the past five years. CINF has a solid surprise history, beating earnings estimates in three of the last four reported quarters, while missing in one, the average surprise being 25.25%.
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 last six months, the stock gained 3.3% compared with the industry’s growth of 19.7%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 2.2% and 0.3% north, respectively, in the past 60 days, reflecting analyst optimism.
Optimistic Growth Outlook
The Zacks Consensus Estimate for Cincinnati Financial’s 2023 earnings is pegged at $5.00 per share, indicating a 17.9% increase from the year-ago reported figure on 12.2% higher revenues of $9 billion. The consensus estimate for 2024 earnings is pegged at $5.88 per share, indicating a 17.7% increase from the year-ago reported figure on 3.9% higher revenues of $9.4 billion.
The expected long-term earnings growth rate is 17.7%, better than the industry average of 12.1%. The company has a Growth Score of B. We expect 2025 bottom line to witness a three-year CAGR of 4.5%.
Business Tailwind
Net written premium should continue to benefit from growth initiatives, better pricing, an agent-centric model and a higher level of insured exposures. We expect 2025 net earned premiums to witness a three-year CAGR of 7.3%.
Also, Cincinnati Financial continues to grow its premiums through a disciplined expansion of Cincinnati Re.
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 an improving rate environment, the momentum is likely to continue. The Fed has already made three hikes in 2023, taking the tally to 11 since March 2022.
Given its nature of business, the insurer is exposed to catastrophe losses. However, banking on prudent underwriting, it has a track record of 34 years of favorable reserve development. It also has a reinsurance program to limit insured loss.
The insurer boasts 62 straight years of dividend increase. This reflects its strong operating performance, 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 Growth Score of A or B in combination with a Zacks Rank #1 (Strong Buy) or 2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are ProAssurance Corporation (PRA - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Chubb Limited (CB - Free Report) . ProAssurance currently sports a Zacks Rank #1, while Axis Capital and Chubb carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
ProAssurance has a decent record of beating earnings estimates in two of the last four quarters and missing in two. PRA has gained 4.6% so far this year.
The Zacks Consensus Estimate for PRA’s 2024 earnings per share is pegged at 83 cents, indicating a year-over-year increase of 143.5%.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. Year to date, AXS has gained 3%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.41 and $9.31, indicating year-over-year increases of 44.7% and 10.7%, respectively.
Chubb has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average being 3.36%. Year to date, CB has lost 7.1%.
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, indicating year-over-year increases of 19.3% and 9.2%, respectively.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Buy Cincinnati Financial (CINF) Stock
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.
The insurer’s earnings have grown 6.8% in the past five years. CINF has a solid surprise history, beating earnings estimates in three of the last four reported quarters, while missing in one, the average surprise being 25.25%.
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 last six months, the stock gained 3.3% compared with the industry’s growth of 19.7%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 2.2% and 0.3% north, respectively, in the past 60 days, reflecting analyst optimism.
Optimistic Growth Outlook
The Zacks Consensus Estimate for Cincinnati Financial’s 2023 earnings is pegged at $5.00 per share, indicating a 17.9% increase from the year-ago reported figure on 12.2% higher revenues of $9 billion. The consensus estimate for 2024 earnings is pegged at $5.88 per share, indicating a 17.7% increase from the year-ago reported figure on 3.9% higher revenues of $9.4 billion.
The expected long-term earnings growth rate is 17.7%, better than the industry average of 12.1%. The company has a Growth Score of B. We expect 2025 bottom line to witness a three-year CAGR of 4.5%.
Business Tailwind
Net written premium should continue to benefit from growth initiatives, better pricing, an agent-centric model and a higher level of insured exposures. We expect 2025 net earned premiums to witness a three-year CAGR of 7.3%.
Also, Cincinnati Financial continues to grow its premiums through a disciplined expansion of Cincinnati Re.
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 an improving rate environment, the momentum is likely to continue. The Fed has already made three hikes in 2023, taking the tally to 11 since March 2022.
Given its nature of business, the insurer is exposed to catastrophe losses. However, banking on prudent underwriting, it has a track record of 34 years of favorable reserve development. It also has a reinsurance program to limit insured loss.
The insurer boasts 62 straight years of dividend increase. This reflects its strong operating performance, 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 Growth Score of A or B in combination with a Zacks Rank #1 (Strong Buy) or 2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are ProAssurance Corporation (PRA - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Chubb Limited (CB - Free Report) . ProAssurance currently sports a Zacks Rank #1, while Axis Capital and Chubb carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
ProAssurance has a decent record of beating earnings estimates in two of the last four quarters and missing in two. PRA has gained 4.6% so far this year.
The Zacks Consensus Estimate for PRA’s 2024 earnings per share is pegged at 83 cents, indicating a year-over-year increase of 143.5%.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. Year to date, AXS has gained 3%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.41 and $9.31, indicating year-over-year increases of 44.7% and 10.7%, respectively.
Chubb has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average being 3.36%. Year to date, CB has lost 7.1%.
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, indicating year-over-year increases of 19.3% and 9.2%, respectively.