Yahoo Finance Why You Should Stay Invested in Cincinnati Financial (CINF)
Cincinnati Financial Corporation CINF has been gaining momentum on the back of higher renewal written premiums, a higher level of insured exposures, flexible liquidity and low leverage and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for Cincinnati Financial’s 2023 earnings is $5.13, indicating a 20.9% increase from the year-ago reported figure on 7.4% higher revenues of $8.62 billion.
The consensus estimate for 2024 earnings is $5.91, indicating a 15.2% increase from the year-ago reported figure on 8.2% higher revenues of $9.34 billion.
Zacks Rank & Price Performance
Cincinnati Financial currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 7.9% compared with the industry’s increase of 0.9%.
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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 extended use of pricing precision tools.
The Commercial Lines business is expected to gain from higher earned premiums, renewal written premiums driven by price increases, growth initiatives and a 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 because of the surge 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. From 2016 to 2022, the P&C insurer saw its net investment income grow 3.96%.
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.
Cincinnati Financial has returned capital to shareholders through regular cash dividends as well as special dividends. In January 2023, the board increased quarterly cash dividend by 9% and this action sets the stage for a 63rd consecutive year of rising dividend payments. Its current dividend yield of 2.7% 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, Everest Re Group, Ltd. RE and Selective Insurance Group, Inc. SIGI. While Kinsale Capital sports a Zacks Rank #1 (Strong Buy), Everest Re and Selective Insurance carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. Year to date, KNSL has gained 21.3%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $9.92 and $11.94, indicating a year-over-year increase of 27.1% and 20.4%, respectively.
Everest Re beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for RE’s 2023 and 2024 earnings per share is pegged at $45.63 and $53.28, indicating a year-over-year increase of 68.5% and 16.7%, respectively. Year to date, RE has gained 9.5%.
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.57 and $7.55, indicating a year-over-year increase of 30.6% and 14.9%, respectively. Year to date, SIGI has gained 9.1%.
The Zacks Consensus Estimate for SIGI’s 2023 and 2024 revenues is pegged at $4.17 billion and $4.60 billion, indicating a year-over-year increase of 13.6% and 10.1%, respectively.
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Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
Selective Insurance Group, Inc. (SIGI) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
