Cincinnati Financial Stock Fair Value – Cincinnati Financial Corp. Stock Rises, But Lags Behind Market Performance
December 16, 2023
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Cincinnati Financial ($NASDAQ:CINF) Corp. stock rose on Wednesday, however it did not match the market’s performance. The company provides a wide range of services, including property and casualty, commercial and personal lines insurance, as well as investment products and services. The company also offers mutual funds, annuities, and life insurance policies for individuals and families. Despite its strong performance in the past, Cincinnati Financial Corp.’s stock is still lagging behind the market’s performance.
Price History
Cincinnati Financial Corporation (CINCINNATI FINANCIAL) experienced a rise in its stock price on Thursday, but still lagged behind the performance of the broader market. At the opening bell, CINCINNATI FINANCIAL’s stock was trading at $106.8, and at the end of the day it had closed at $104.9, representing a decline of 1.0% from its previous closing price of 106.0. 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 |
| 9.77k | 1.67k | 17.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Cincinnati Financial. More…
| Operations | Investing | Financing |
| 2.11k | -1.52k | -765 |
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 |
| 30.91k | 20.29k | 67.71 |
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 |
| 11.8% | – | 21.8% |
| FCF Margin | ROE | ROA |
| 21.4% | 12.3% | 4.3% |
Analysis – Cincinnati Financial Stock Fair Value
At GoodWhale, we have conducted an analysis of CINCINNATI FINANCIAL‘s financials and have determined the fair value of their share to be around $130.5. This fair value was calculated using our proprietary Valuation Line. Although the current stock price for CINCINNATI FINANCIAL is $104.9, this is still a fair price undervalued by 19.6%. As a result, we believe that now is an opportune time to invest in CINCINNATI FINANCIAL’s shares. More…
Peers
Cincinnati Financial Corp, Mercury General Corp, United Fire Group Inc, and FedNat Holding Co are all insurance companies. They offer similar products and services, but each has its own strengths and weaknesses. Cincinnati Financial Corp is the largest of the four, with the most assets and the most customers. Mercury General Corp has the most diverse product line, offering everything from auto insurance to life insurance. United Fire Group Inc is the most innovative of the four, constantly developing new products and services. FedNat Holding Co is the most stable of the four, with a strong financial rating and a long history of profitability.
– Mercury General Corp ($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 Corporation experienced a rise in their stock prices on Wednesday, albeit underperforming compared to the market as a whole. The company has seen a mixed record of performance over the past year, with some losses and gains. Investment analysts point to the company’s diverse portfolio of insurance services as a potential driver of future growth, while its strong capitalization and relatively low debt-to-equity ratio provides a strong safety net. Although Cincinnati Financial is vulnerable to market volatility, their current financial position bodes well for potential investors and suggests that their stock may experience further gains.
