Cincinnati Financial Hits 52-Week High on Stellar Q3 Results
On Nov 25, 2015, shares of Cincinnati Financial Corp. CINF hit a 52-week high of $61.56, driven by better-than-expected third-quarter results and the announcement of a special dividend. With about 0.5 million shares exchanging hands in the last trading session, the stock finally closed the session at $60.86. Year to date, the stock has returned 17.42% comparing favorably with 8.02% gains by Nasdaq.
Cincinnati Financial’s operating earnings of $1.40 per share in the third quarter surpassed the Zacks Consensus Estimate by 50.7% and improved 22.4% year over year. The sturdy performance came on the back of solid underwriting results and a higher investment income. With respect to the surprise trend, the Zacks Rank #1 (Strong Buy) property and casualty insurer delivered positive surprises in three of the last four quarters, with an average beat of 42.14%.
Revenues increased on higher premiums and investment income. Combined ratio – a measure of underwriting profitability –also exhibited improvement.
Inspired by better-than-expected earnings in each of the three reported quarters this year, the board of directors of Cincinnati also announced a special dividend of 46 cents per share. This is in addition to the quarterly dividend of 46 cents per share. Notably, this is the insurer’s first special cash dividend in more than a decade. However, the company has a solid track of hiking its dividend each year. Its dividend yield betters the industry average.
These positives drove the Zacks Consensus Estimate higher on upward revisions in the last 60 days. The Zacks Consensus Estimate increased 21.8% to $3.35 for 2015 and 6.1% to $2.60 for 2016.
Other Stocks to Consider
Investors interested in the property and casualty insurance space can consider some other stocks like Selective Insurance Group Inc. SIGI, RLI Corp. RLI and Hallmark Financial Services Inc. HALL. Each of these stocks also sports a Zacks Rank #1.
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RLI CORP (RLI): Free Stock Analysis Report
CINCINNATI FINL (CINF): Free Stock Analysis Report
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SELECT INS GRP (SIGI): Free Stock Analysis Report
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