Here's Why One Should Retain Cincinnati Financial (RDN) Now
Cincinnati Financial Corporation CINF has been gaining momentum on the back of higher renewal written premiums, growth in equity portfolio dividends, a strong capital position and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for 2023 earnings per share is pegged at $4.51, indicating year-over-year increase of 7.07%.
Earnings Surprise History
Cincinnati Financial has a solid earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average being 0.70%.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 9.1% against the industry’s increase of 0.9%.
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Return on Equity (ROE)
Cincinnati Financial’s ROE for the trailing 12 months is 7% which is better than the industry average of 6.6%. This reflects the company’s efficiency in utilizing shareholders’ funds.
Style Score
Cincinnati Financial has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
Cincinnati Financial is well-poised to grow on the back of solid performance across the Commercial Lines and Personal Lines segments.
Performance of the Personal lines segment is likely to be driven by the planned expansion of high-net-worth business produced by the agencies, higher renewal written premiums and the expanded use of pricing precision tools.
The Commercial lines business is expected to grow, riding on higher earned premiums and higher level of insured exposures. This segment continued to experience estimated average renewal price increases in the mid-single-digit percentage range.
Investment income should continue to rise owing to increase in equity portfolio dividends and increase in interest income from fixed-maturity securities. Moreover, cash flow from operating activities consistently helps the company boost investment income.
Cincinnati Financial has a solid balance sheet with high liquidity and low leverage. Cash flow, a contributor to investment income and interest income, remains strong. CINF boasts 33 years of favorable reserve development.
Cincinnati Financial returned capital to shareholders through regular cash dividends as well as special dividends. Over the past 61 years, the shareholders have benefited from dividend hikes and this action sets the stage for a 62nd consecutive year. Its current dividend yield of 2.5% is higher than the industry’s average of 0.3%.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Kinsale Capital Group, Inc. KNSL, The Travelers Companies, Inc. TRV and First American Financial Corporation FAF, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Kinsale Capital beat estimates in each of the last four quarters, the average being 15.16%. The Zacks Consensus Estimate for 2023 has moved 0.9% north in the past 30 days.
The Zacks Consensus Estimate for KNSL’s 2023 earnings per share is pegged at $8.98, indicating year-over-year increase of 22.3%. In the past year, KNSL has gained 41.3%.
The Zacks Consensus Estimate for The Travelers’ 2023 earnings per share is pegged at $14.69, indicating year-over-year increase of 11.2%. In the past year, TRV has gained 18.8%.
The Zacks Consensus Estimate for TRV’s 2023 has moved 0.5% north in the past 60 days, reflecting analysts’ optimism.
First American has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, FAF has lost 25.9%.
The Zacks Consensus Estimate for FAF’s 2023 earnings has moved 3.9% north in the past 60 days.
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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
First American Financial Corporation (FAF) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
