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Cincinnati Financial (CINF) Rewards Shareholders, Hikes Dividend

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Zacks Equity Research
·3 min read
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The board of directors of Cincinnati Financial Corporation CINF recently approved a hike in its quarterly dividend to enhance shareholder value. The company will now pay out a dividend of 63 cents per share compared with 60 cents paid on Jan 15, 2021, which reflects an increase of 5%. Shares of Cincinnati Financial gained 3.9% in the trading session on Feb 1.

Shareholders of record as of Mar 17, 2021 will receive the increased dividend on Apr 15, 2021.

Historically, it boasts a consistent increase in dividends with the metric witnessing a five-year CAGR (2015-2020) of 5.5%.

Based on the stock’s Jan 29 closing price of $84.09, the new dividend will yield 2.8%, better than the industry average of 0.6%. This makes Cincinnati Financial an attractive pick for yield-seeking investors. Prior to this, the company had raised quarterly dividend by 7.1% to 60 cents per share last January 2020.

The board of directors is committed to rewarding shareholders directly through cash dividends and through share repurchase authorizations. Moreover, investors should be impressed by its stellar record of 61 straight years of dividend increases, a record which is believed to be matched by only seven other publicly traded companies. Currently, it has $13 million remaining under the share repurchase authorization.

The 2020 dividend increase reflected its strong earnings performance and signaled management's positive outlook and confidence in outstanding capital, liquidity and financial flexibility.

Recently, another insurer, Arthur J. Gallagher & Co. AJG hiked its dividend by 6.7%. Shareholders of record as of Mar 5, 2021 will receive the increased dividend on Mar 19, 2021.

Shares of this Zacks Rank #3 (Hold) property and casualty insurer have gained 11.5% in the past six months, outperforming the industry’s increase of 9.2%. Moreover, higher premiums, and continued strong performance at Commercial Lines segment are likely to drive shares higher in the near term.

Stocks to Consider

Some better-ranked players in the property and casualty industry are Alleghany Y and Fidelity National Financial FNF, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alleghany’s bottom line surpassed estimates in two of the last four quarters and missed the other two, the average beat being 34.08%.

Fidelity National Financial surpassed earnings estimates in each of the last four quarters, the average surprise being 30.48%.

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Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report

Alleghany Corporation (Y) : Free Stock Analysis Report

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Zacks Investment Research