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CNA Stock Trading at a Discount to Industry at 1.11X: Time to Buy?
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Key Takeaways
CNA Financial expects continued premium growth driven by solid retention and new business across segments.
The insurer's fixed-income strategy and $11.5B statutory capital base support stable investment performance.
CNA Financial's strong dividend history, including a 10-year CAGR of 6.3%, underscores its capital strength.
CNA Financial Corporation (CNA - Free Report) shares are trading at a discount compared to the Zacks Property and Casualty Insurance industry. Its forward price-to-book value of 1.11X is lower than the industry average of 1.49X, the Finance sector’s 4.26X and the Zacks S&P 500 Composite’s 8.19X. The insurer has a Value Score of A.
Shares of RenaissanceRe Holdings Ltd. (RNR - Free Report) , NMI Holdings Inc. (NMIH - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) are also trading at a discount to the industry average.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $12.51 billion. The average volume of shares traded in the last three months was 0.4 million.
CNA Trading Above 50-Day Moving Average
Shares of CNA Financial closed at $46.23 on Nov. 20, near its 52-week high of $51.42. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day simple moving average (SMA) of $45.83, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
CNA’s Encouraging Growth Projection
The Zacks Consensus Estimate for CNA Financial’s 2025 revenues is pegged at $13.53 billion, implying a year-over-year improvement of 6.2%. The consensus estimate for 2026 revenues indicates an increase of 2%, from the corresponding 2025 estimates.
Optimistic Analyst Sentiment on CNA
Each of the two analysts covering the stock has lowered estimates for 2025, while one has raised the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 7.5% and 0.4% north, respectively, in the last 60 days.
Image Source: Zacks Investment Research
CNA Price Performance
Shares of CNA Financial have lost 6.8% in the past year against the industry’s growth of 4.1%.
Image Source: Zacks Investment Research
CNA’s Favorable Return on Capital
CNA Financial’s trailing 12-month ROE of 12.7% is better than the industry average of 8%.
Factors Favoring CNA
CNA Financial’s premiums should continue to grow on solid retention, favorable renewal premium change and new business growth across Specialty, Commercial and International segments.
An improving rate environment is favorable for an insurer. Amid the lower rate environment, the company’s fixed-income investment strategy with the highest allocations to diversified investment grade corporates, as well as highly rated municipal securities, should support investment results.
CNA Financial has a solid balance sheet with capital remaining above the target levels required for all ratings. It exited the third quarter with statutory capital and surplus in the combined Continental Casualty Companies of $11.5 billion. CNA Financial continues to maintain a conservative capital structure. It maintains liquidity in the form of cash and short-term investments, which helps to sustain business variability.
Strong financial position enables CNA Financial to engage in shareholder-friendly moves like dividend hikes. The insurer’s dividend history is impressive, as it witnessed a 10-year CAGR (2015-2025) of 6.3%. The current dividend yield of 3.9% is better than the industry average of 0.2%. On the back of a disciplined execution, denoted by strong underwriting results and confidence in future earnings performances, the insurer has been hiking dividends, apart from paying special dividends over the past couple of years. Thus, the company remains committed to returning more value to shareholders.
Conclusion
Solid retention, favorable renewal premium change and new business growth across its segments will continue to induce growth for CNA Financial. As part of wealth distribution to shareholders, CNA also has an impressive dividend history, reflecting capital strength, that are expected to be attractive to generate long-term value for shareholders.
Its solid growth projections as well as attractive valuations are other positives. Coupled with optimistic analyst sentiment and favorable ROE, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CNA has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.
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CNA Stock Trading at a Discount to Industry at 1.11X: Time to Buy?
Key Takeaways
CNA Financial Corporation (CNA - Free Report) shares are trading at a discount compared to the Zacks Property and Casualty Insurance industry. Its forward price-to-book value of 1.11X is lower than the industry average of 1.49X, the Finance sector’s 4.26X and the Zacks S&P 500 Composite’s 8.19X. The insurer has a Value Score of A.
Shares of RenaissanceRe Holdings Ltd. (RNR - Free Report) , NMI Holdings Inc. (NMIH - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) are also trading at a discount to the industry average.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $12.51 billion. The average volume of shares traded in the last three months was 0.4 million.
CNA Trading Above 50-Day Moving Average
Shares of CNA Financial closed at $46.23 on Nov. 20, near its 52-week high of $51.42. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day simple moving average (SMA) of $45.83, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
CNA’s Encouraging Growth Projection
The Zacks Consensus Estimate for CNA Financial’s 2025 revenues is pegged at $13.53 billion, implying a year-over-year improvement of 6.2%.
The consensus estimate for 2026 revenues indicates an increase of 2%, from the corresponding 2025 estimates.
Optimistic Analyst Sentiment on CNA
Each of the two analysts covering the stock has lowered estimates for 2025, while one has raised the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 7.5% and 0.4% north, respectively, in the last 60 days.
Image Source: Zacks Investment Research
CNA Price Performance
Shares of CNA Financial have lost 6.8% in the past year against the industry’s growth of 4.1%.
Image Source: Zacks Investment Research
CNA’s Favorable Return on Capital
CNA Financial’s trailing 12-month ROE of 12.7% is better than the industry average of 8%.
Factors Favoring CNA
CNA Financial’s premiums should continue to grow on solid retention, favorable renewal premium change and new business growth across Specialty, Commercial and International segments.
An improving rate environment is favorable for an insurer. Amid the lower rate environment, the company’s fixed-income investment strategy with the highest allocations to diversified investment grade corporates, as well as highly rated municipal securities, should support investment results.
CNA Financial has a solid balance sheet with capital remaining above the target levels required for all ratings. It exited the third quarter with statutory capital and surplus in the combined Continental Casualty Companies of $11.5 billion. CNA Financial continues to maintain a conservative capital structure. It maintains liquidity in the form of cash and short-term investments, which helps to sustain business variability.
Strong financial position enables CNA Financial to engage in shareholder-friendly moves like dividend hikes. The insurer’s dividend history is impressive, as it witnessed a 10-year CAGR (2015-2025) of 6.3%. The current dividend yield of 3.9% is better than the industry average of 0.2%. On the back of a disciplined execution, denoted by strong underwriting results and confidence in future earnings performances, the insurer has been hiking dividends, apart from paying special dividends over the past couple of years. Thus, the company remains committed to returning more value to shareholders.
Conclusion
Solid retention, favorable renewal premium change and new business growth across its segments will continue to induce growth for CNA Financial. As part of wealth distribution to shareholders, CNA also has an impressive dividend history, reflecting capital strength, that are expected to be attractive to generate long-term value for shareholders.
Its solid growth projections as well as attractive valuations are other positives. Coupled with optimistic analyst sentiment and favorable ROE, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CNA has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.