Cincinnati Financial Intrinsic Value Calculation – CINCINNATI FINANCIAL Reports Q2 FY2023 Earnings Results on July 27th
July 30, 2023
🌥️Earnings Overview
CINCINNATI FINANCIAL ($NASDAQ:CINF) announced their earnings results for the second quarter of FY2023 on July 27 2023. For the three months ended June 30 2023, total revenue was USD 2605.0 million, a 216.1% surge from the same quarter of the previous year (USD 820.0 million). Net income rose 166.1% to USD 534.0 million compared to the same quarter in the prior year.
Share Price
At the start of the day, CINCINNATI FINANCIAL stock opened at $103.7 and closed at $102.6, down by 1.0% from its previous closing price of 103.6. This marks a slight decline in share price, although the company’s overall performance appears to remain steady. Overall, CINCINNATI FINANCIAL seems to have had a successful quarter, despite a slight dip in stock price on the day of the report. The company’s financial results were strong and indicate continued growth and stability for the organization moving forward. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Cincinnati Financial. More…
| Total Revenues | Net Income | Net Margin |
| 9.37k | 1.36k | 14.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cincinnati Financial. More…
| Operations | Investing | Financing |
| 2.12k | -1.53k | -943 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Cincinnati Financial. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 31.35k | 20.32k | 70.34 |
Key Ratios Snapshot
Some of the financial key ratios for Cincinnati Financial are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 13.1% | – | 18.1% |
| FCF Margin | ROE | ROA |
| 22.5% | 9.8% | 3.4% |
Analysis – Cincinnati Financial Intrinsic Value Calculation
At GoodWhale, we recently analyzed CINCINNATI FINANCIAL‘s financials and have come to the conclusion that the fair value of CINCINNATI FINANCIAL share is around $125.8. This was calculated using our proprietary Valuation Line, and the current price of CINCINNATI FINANCIAL stock is $102.6. This presents a good opportunity for investors, as it is currently undervalued by 18.4%. More…
Peers
Cincinnati Financial Corp, Mercury General Corp, United Fire Group Inc, and FedNat Holding Co are all insurance companies. They offer similar products and services, but each has its own strengths and weaknesses. Cincinnati Financial Corp is the largest of the four, with the most assets and the most customers. Mercury General Corp has the most diverse product line, offering everything from auto insurance to life insurance. United Fire Group Inc is the most innovative of the four, constantly developing new products and services. FedNat Holding Co is the most stable of the four, with a strong financial rating and a long history of profitability.
– Mercury General Corp ($NYSE:MCY)
Mercury General Corporation is an insurance holding company that, through its subsidiaries, provides personal automobile insurance in the United States. The company operates through four segments: Personal Auto, Commercial Auto, Other Business, and Investment.
Mercury General’s market cap has declined significantly over the past few years, from over $5 billion in 2015 to just over $1.6 billion as of 2022. The company’s return on equity has also been negative in recent years, reaching -16.66% in 2021.
The company has struggled in recent years due to a combination of factors, including increased competition, higher claims costs, and lower investment returns. Mercury General has taken steps to improve its financial performance, including reducing expenses and increasing its focus on higher-margin business segments. However, it remains to be seen whether these efforts will be enough to turn the company around in the long term.
– United Fire Group Inc ($NASDAQ:UFCS)
United Fire Group, Inc., through its subsidiaries, provides insurance protection in the property and casualty market for individuals, families, and businesses worldwide. The company operates in three segments: Property and Casualty, Reinsurance, and Life. The Property and Casualty segment offers commercial and personal lines of property and casualty insurance products, including automobile, homeowners, workers’ compensation, general liability, commercial multi-peril, and commercial automobile insurance products; and reinsurance products. The Reinsurance segment provides property and casualty reinsurance products. The Life segment offers life insurance and annuity products. United Fire Group, Inc. was founded in 1834 and is headquartered in Cedar Rapids, Iowa.
– FedNat Holding Co ($NASDAQ:FNHC)
Founded in 1934, Federated National Holding Company is a provider of personal and commercial property and casualty insurance products in the United States. The company operates through the following segments: Personal Lines, Commercial Lines, and Specialty Lines. Federated National Holding Company offers its products through a network of independent agents and brokers.
Summary
CINCINNATI FINANCIAL reported impressive second-quarter earnings for FY2023. Total revenue surged 216.1% to USD 2605 million compared to the same quarter a year ago, and net income increased 166.1%. This indicates that CINCINNATI FINANCIAL has been able to successfully capitalize on the current market conditions. Investors looking to capitalize on this growth should consider adding CINCINNATI FINANCIAL to their portfolio as it has demonstrated the potential for strong future returns.
Additionally, the company’s robust cash reserves and low debt provide security and resilience in case of an economic downturn.
