Cincinnati Financial Stock Intrinsic Value – CINCINNATI FINANCIAL Reports Fourth Quarter Earnings Results for Fiscal Year 2022 on February 6 2023

Earnings Overview

On February 6 2023, CINCINNATI FINANCIAL ($NASDAQ:CINF) released their fourth quarter fiscal year 2022 earnings results, which ended on December 31 2022. Revenue amounted to USD 1.0 billion, a 31.3% decrease from the same quarter of FY2021. Net income was reported at USD 3.1 billion, 6.3% lower than the year before.

Transcripts Simplified

Investment income and dividend income rose significantly in the fourth quarter and full year of 2022. Net equity securities purchased totaled $36 million. Bond interest income was up 11% in the fourth quarter and pretax average yields were higher than the prior year. Cash flow from operating activities was up 4% in the full year and 36% in the fourth quarter.

Total property casualty underwriting expense ratio was 0.2 percentage points lower than last year. Property casualty net loss and loss expense reserves increased by $1.029 billion and there was $159 million of net favorable reserve development for the year which lowered combined ratio by 2.3 percentage points.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Cincinnati Financial. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Cincinnati Financial. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Cincinnati Financial. More…

Key Ratios Snapshot

Some of the financial key ratios for Cincinnati Financial are shown below. More…

Price History

On Monday, CINCINNATI FINANCIAL stock opened at $114.6 and closed at $115.3, up 0.1% from its last closing price of 115.1. The stock acknowledged a positive market sentiment as investors cheered on the results, leading to a modest share price increase for CINCINNATI FINANCIAL. Going forward, investors remain optimistic of continued growth and further improvements in the company’s financials. Live Quote…

Analysis – Cincinnati Financial Stock Intrinsic Value

At GoodWhale, we help users analyze CINCINNATI FINANCIAL‘s financials. After extensive analysis of its financials, we have come up with a calculated fair value of $109.6 for its stock. Currently, the market value of CINCINNATI FINANCIAL’s stock is higher at $115.3, overvalued by 5.2%. It is advised that investors exercise caution while sensing the price movement in the stock. 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

Investors may be cautious when evaluating CINCINNATI FINANCIAL’s fourth quarter FY2022 financials, with total revenue coming in at USD 1.0 billion, a 31.3% decrease compared to the same period last year. Net income was reported at USD 3.1 billion, a 6.3% decrease from the same quarter of FY2021. Despite these decreases, some investors may be encouraged by the fact that their losses weren’t as severe as expected. Regardless, it is important for investors to do further in-depth research before making any decisions regarding CINCINNATI FINANCIAL’s stocks.