Shares of Cincinnati Financial Corporation CINF have rallied 29.1% in a year compared with the industry and the Finance sector’s rally of 21.6% and 22.5%, respectively. The Zacks S&P 500 composite has increased 26.2% in the said time frame. With a market capitalization of $19.2 billion, the average volume of shares traded in the last three months was 0.5 million.
Agent-centered business model, improving premium, industry-leading margins, and solid capital position continue to drive Cincinnati Financial. This Zacks Rank #3 (Hold) property and casualty insurer has a solid track of beating earnings estimates in the trailing four quarters.
Return on equity in the trailing 12 months was 8.6%, better than the industry average of 5.6%. This highlights the company’s efficiency in utilizing shareholders’ fund.
Cincinnati Financial has a favorable VGM Score of B.
Can it Retain the Momentum?
Placed among the top 25 U.S. P&C insurers, Cincinnati Financial’s premium growth outperforms the industry average. The insurer continues to appoint new agency, expand marketing and service capabilities with a focus on high net worth clients, expand reinsurance assumed through Cincinnati Re to deploy capital and diversify risk to fuel premium improvement.
CINF has already implemented predictive analytics to improve its pricing precision while leveraging local relationships with its agents.
Prudent underwriting helps Cincinnati Financial deliver improved profitability. CINF targets a 95% to 100% combined ratio over the long term.
The company targets a value creation ratio of 10% to 13% over the next five years. Sustained solid operational performance should help it achieve the target.
Cincinnati Financial has a solid balance sheet with high liquidity and low leverage. The insurer boasts 32 years of favorable reserve development.
Cincinnati Financial has a favorable Growth Score of B
Riding on a solid capital position, Cincinnati Financial has been hiking dividends for the last 61 years. Only seven U.S. public companies match this record. Its dividend yield of 2.1% appears attractive compared with the industry average of 0.3%, making it an attractive pick for yield-seeking investors.
Stocks to Consider
Some better-ranked stocks from the same space include Hallmark Financial Services HALL, Fidelity National Financial FNF and ProAssurance PRA, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hallmark Financial’s 2022 earnings stands at 25 cents on revenues of $363.2 million. Hallmark Financial, sporting a Zacks Rank #1, delivered a four-quarter average earnings surprise of 53.62%.
The Zacks Consensus Estimate for 2022 Fidelity National’s earnings has moved up 4.6% in the past 60 days. Fidelity National delivered a four-quarter average earnings surprise of 38.18%.
The Zacks Consensus Estimate for ProAssurance’s 2022 earnings has moved up 5.3% higher in the past 60 days. ProAssurance delivered a four-quarter average earnings surprise of 233.34%.
Shares of HALL, FNF, and PRA have rallied 26.1%, 42.1% and 52.9%, respectively, in a year.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cincinnati Financial Corporation (CINF): Free Stock Analysis Report
ProAssurance Corporation (PRA): Free Stock Analysis Report
Fidelity National Financial, Inc. (FNF): Free Stock Analysis Report
Hallmark Financial Services, Inc. (HALL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research