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Valued at a market cap of roughly $21.1 billion, Ohio-based Cincinnati Financial Corporation (CINF) provides a range of insurance products for businesses, homes, and autos. The company’s local independent agencies also offer life insurance, fixed annuities, and surplus lines property and casualty insurance, giving customers access to a comprehensive suite of coverage options.
Companies worth $10 billion or more are generally classified as “large-cap” stocks, and Cincinnati perfectly fits that description, with its market cap exceeding this threshold, showcasing its impressive scale, industry influence, and commanding presence in the insurance world. Founded in 1950, the company has built a reputation as the ultimate one-stop shop for insurance, offering a wide range of products and a strong local presence to meet every need.
Even after factoring in a 3.4% pullback from its 52-week peak of $139.34 reached earlier this month, CINF stock is up almost 16.7% over the past three months, soaring beyond the iShares U.S. Financials ETF’s (IYF) 10.8% gain during the same time frame.
Over the longer term, CINF stock gained roughly 23% over the past year, lagging behind the IYF’s 34% return. But, in 2024, the insurance stock appears to have outpaced the broader financial sector, with a notable gain of 30.1% versus IYF’s 22.1% return on a YTD basis.
To confirm the bullish price trend, CINF stock has remained above its 50-day and 200-day moving averages since the beginning of January despite a few fluctuations in between.
Cincinnati's impressive price action this year can be attributed to robust premium growth, stable investment income, and an unwavering dedication to rewarding shareholders. Its status as a dividend king, highlighted by an impressive 63-year streak of consecutive dividend increases, not only underscores its commitment to delivering value to investors but also serves as a testament to the company’s strong financial health.
Plus, following the company's Q2 earnings results revealed on Jul. 25, shares of Cincinnati shot up more than 3% the very next day. Despite missing revenue estimates, the positive reaction was triggered by a notable 11% annual jump in revenue from earned premiums and a 10% year-over-year revenue growth from investment income. In addition, the company’s stronger-than-expected bottom line further uplifted investor sentiment toward the stock.
While CINF’s rival, The Travelers Companies, Inc. (TRV), impressed with a 42% gain over the past year, blowing past CINF’s returns, TRV’s 2024 performance lost some steam, trailing behind CINF with a more modest YTD return of 25.2%.
Yet, despite CINF’s strong price action compared to the broader sector, Wall Street remains cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 10 analysts in coverage, and the mean price target of $136.75 suggests a marginal potential upside to its current levels.
On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
