Cincinnati Financial CINF is well-poised for growth, given sustained solid performance at its Commercial Lines segment, better pricing, strategic initiatives to drive growth and sound capital position.
Estimates for Cincinnati Financial have been revised upward over the past 60 days, indicating investor optimism on the stock. The Zacks Consensus Estimate for 2019 earnings per share has moved 7.1% north while that for 2020 has moved up 1.4% in the said time frame. The company also has a decent history of beating estimates in the last five quarters with the average being 25.80%.
Shares of Cincinnati Financial have rallied 47.7% year to date, outperforming the industry’s increase of 5.6%.
Cincinnati Financials’s return on equity was 7.2% in the trailing 12-month period, higher than the industry average of 6.8%. Return on equity is a profitability measure that identifies the company’s efficiency in utilizing its shareholders’ funds.
The top line of the company’s Commercial Lines segment, contributing the majority of its revenues, has been witnessing improvement. Several growth initiatives and better pricing should help it retain the momentum. Also, improving excess and surplus lines market poise Cincinnati Financial’s Excess and Surplus line segment well for net written premium growth. Net written premium nearly doubled in the last five years.
As part of the strategic initiatives, Cincinnati Financial appointed new agencies to write more business and increase market share. The company intends to appoint about 100 additional agencies in 2019 to offer property and casualty insurance and personal lines services and 80 more agencies to market only the company’s personal lines products, mainly the ones with a high net worth focus.
This Zacks Rank #2 (Buy) property and casualty insurer boasts a solid capital position. Its steady cash flow supports liquidity and aids the company to hike dividends as well as pay out special dividends. Its dividend yield of 2% betters the industry average of 0.4%. Cincinnati Financial has a stellar record of hiking annual dividend for the past 59 years, a record matched by only seven other publicly-traded companies in the United States. These endeavors make the stock an attractive pick for yield-seeking investors.
The Zacks Consensus Estimate for 2019 earnings per share is pegged at $3.75, indicating year-over-year increase of nearly 11.9%.
Other Stocks to Consider
Investors interested in property and casualty insurance stocks may look at Hallmark Financial Services HALL, Palomar Holdings PLMR, and RenaissanceRe Holdings RNR each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hallmark Financial underwrites markets, distributes and services property and casualty insurance products in the United States. The company came up with average four-quarter positive surprise of 97.50%.
Palomar Holdings provides personal and commercial specialty property insurance products. The company delivered average four-quarter positive surprise of 25%.
RenaissanceRe Holdings provides insurance and reinsurance products in the United States and internationally. The company pulled off an average four-quarter positive surprise of 141.77%.
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Hallmark Financial Services, Inc. (HALL) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report
Palomar Holdings, Inc. (PLMR) : Free Stock Analysis Report
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