On Feb 21, 2013, we upgraded our recommendation on
Cincinnati Financial Corp.
) to Outperform from Neutral following its better-than-expected
fourth quarter earnings, which included a 122.0% positive
earnings surprise. This property and casualty insurer carries a
Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Cincinnati Financial's fourth quarter results reflected a
steadily growing benefit of initiatives designed to improve
insurance profitability, drive premium growth overtime and create
Cincinnati Financial grew premium in each of its property
casualty segments. Consolidated net written premiums for
the fourth quarter rose by 10%, led by higher overall
The company reported an improvement in combined ratio in all
three of its property casualty segments.
The company is also continuing to appoint agencies, which is
one of its strategic goals for 2013. The increase in agency count
is expected to bring in premium growth.
Cincinnati Financial also boasts of a strong balance sheet
with low reliance on debt witnessed by a debt to capital ratio of
less than 14.1% as of Dec 31, 2012. Moreover, its consistent cash
flows and prudent cash balances continue to create strong
liquidity. The company is also a favorite among investors because
it has fulfilled a commitment of increased dividend payment every
year for the past 52 years.
Others players in the same industry
State Auto Financial Corp.
XL Group plc
Navigators Group Inc.
) carrying Zacks Rank #1 (Strong Buy) and are worth
CINCINNATI FINL (CINF): Free Stock Analysis
NAVIGATORS GRP (NAVG): Free Stock Analysis
STATE AUTO FINL (STFC): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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