LSE:0HYE

Stock Analysis Report

Executive Summary

Cincinnati Financial Corporation, together with its subsidiary, provides property casualty insurance products in the United States.


Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Cincinnati Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 0HYE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

0HYE

1.6%

GB Insurance

0.5%

GB Market


1 Year Return

27.5%

0HYE

2.1%

GB Insurance

6.6%

GB Market

Return vs Industry: 0HYE exceeded the UK Insurance industry which returned 1.8% over the past year.

Return vs Market: 0HYE exceeded the UK Market which returned 6.1% over the past year.


Shareholder returns

0HYEIndustryMarket
7 Day0%1.6%0.5%
30 Day0.5%4.1%-2.4%
90 Day-1.7%10.0%4.0%
1 Year30.4%27.5%13.5%2.1%12.2%6.6%
3 Yearn/a18.8%-2.4%17.8%2.9%
5 Yearn/a31.6%-2.3%35.7%4.6%

Price Volatility Vs. Market

How volatile is Cincinnati Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Cincinnati Financial undervalued compared to its fair value and its price relative to the market?

9.41x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 0HYE ($106.8) is trading above our estimate of fair value ($81.6)

Significantly Below Fair Value: 0HYE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 0HYE is good value based on its PE Ratio (9.4x) compared to the Insurance industry average (14.5x).

PE vs Market: 0HYE is good value based on its PE Ratio (9.4x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: 0HYE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 0HYE is overvalued based on its PB Ratio (1.9x) compared to the GB Insurance industry average (1.8x).


Next Steps

Future Growth

How is Cincinnati Financial forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-53.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 0HYE's earnings are forecast to decline over the next 3 years (-53.8% per year).

Earnings vs Market: 0HYE's earnings are forecast to decline over the next 3 years (-53.8% per year).

High Growth Earnings: 0HYE's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 0HYE's revenue is expected to decline over the next 3 years (-6.6% per year).

High Growth Revenue: 0HYE's revenue is forecast to decline over the next 3 years (-6.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 0HYE's Return on Equity is forecast to be low in 3 years time (6.5%).


Next Steps

Past Performance

How has Cincinnati Financial performed over the past 5 years?

18.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 0HYE has a high level of non-cash earnings.

Growing Profit Margin: 0HYE's current net profit margins (25.2%) are higher than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: 0HYE's earnings have grown by 18.7% per year over the past 5 years.

Accelerating Growth: 0HYE's earnings growth over the past year (595.8%) exceeds its 5-year average (18.7% per year).

Earnings vs Industry: 0HYE earnings growth over the past year (595.8%) exceeded the Insurance industry 23.4%.


Return on Equity

High ROE: 0HYE's Return on Equity (20.2%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cincinnati Financial's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: 0HYE has a low level of unsold assets or inventory.

Debt Coverage by Assets: 0HYE's debt is covered by short term assets (assets are 4.1x debt).


Financial Institutions Analysis

Asset Level: 0HYE's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 0HYE has a sufficient allowance for bad loans.

Low Risk Liabilities: 0HYE reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 0HYE has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 0HYE has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 0HYE has an appropriate level of bad loans.


Next Steps

Dividend

What is Cincinnati Financial's current dividend yield, its reliability and sustainability?

2.08%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 18 2020Ex Dividend DateMar 17 2020Dividend Pay DateApr 15 202029 days from Ex DividendBuy in the next 28 days to receive upcoming dividend

Dividend Yield vs Market

company2.1%marketbottom25%1.8%markettop25%5.1%industryaverage4.7%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: 0HYE's dividend (2.08%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: 0HYE's dividend (2.08%) is low compared to the top 25% of dividend payers in the UK market (5.1%).


Stability and Growth of Payments

Stable Dividend: 0HYE's dividends per share have been stable in the past 10 years.

Growing Dividend: 0HYE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18.3%), 0HYE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 0HYE's dividends in 3 years are forecast to be covered by earnings (69.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.8yrs

Average management tenure


CEO

Steve Johnston (59yo)

8.8yrs

Tenure

US$3,444,610

Compensation

Mr. Steven Justus Johnston, also known as Steve, FCAS, MAAA, CFA, CERA, has been the President of The Cincinnati Life Insurance Company at Cincinnati Financial Corp. since January 01, 2015. Mr. Johnston ha ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD3.44M) is about average for companies of similar size in the UK market ($USD4.70M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Steven Johnston
President8.8yrsUS$3.44m0.071% $13.4m
Michael Sewell
CFO, Senior VP & Treasurer8.8yrsUS$2.16m0.042% $7.9m
Martin Hollenbeck
Chief Investment Officer11.1yrsUS$1.80m0.038% $7.1m
Martin Mullen
Chief Claims Officer & Senior VP of The Cincinnati Insurance Company12.1yrsUS$1.59m0.042% $7.9m
Dennis McDaniel
VP & Investor Relations Officer11.1yrsno datano data
Lisa Love
Senior VP8.8yrsno data0.021% $3.9m
Betsy Ertel
Vice President of Corporate Communications0yrsno datano data
Angela Delaney
Senior Vice President of Sales & Marketing0yrsno datano data
Gregory Ziegler
Human Resources Director0yrsno datano data
R. Sandercox
MD & Head of Specialty Casualty Reinsurance3.5yrsno datano data

8.8yrs

Average Tenure

59yo

Average Age

Experienced Management: 0HYE's management team is seasoned and experienced (8.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Steven Johnston
President8.8yrsUS$3.44m0.071% $13.4m
Gretchen Price
Independent Director18.1yrsUS$187.29k0.018% $3.4m
Kenneth Stecher
Non-Executive Chairman of the Board8.8yrsUS$270.97k0.093% $17.4m
William Bahl
Lead Independent Director0yrsUS$278.86k0.14% $25.8m
Kenneth Lichtendahl
Independent Director31.8yrsUS$167.87k0.023% $4.4m
Thomas Schiff
Director44.8yrsUS$209.12k1.13% $211.3m
Larry Webb
Director40.8yrsUS$226.32k0.31% $57.9m
William McMullen
Independent Director19.1yrsUS$231.24k0.033% $6.2m
Douglas Skidmore
Independent Director15.8yrsUS$176.10k0.024% $4.5m
Dirk Debbink
Independent Director7.3yrsUS$174.13k0.020% $3.8m

18.1yrs

Average Tenure

63.5yo

Average Age

Experienced Board: 0HYE's board of directors are seasoned and experienced ( 18.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 0HYE insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Cincinnati Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cincinnati Financial Corporation
  • Ticker: 0HYE
  • Exchange: LSE
  • Founded: 1950
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$18.768b
  • Shares outstanding: 162.90m
  • Website: https://www.cinfin.com

Number of Employees


Location

  • Cincinnati Financial Corporation
  • 6200 South Gilmore Road
  • Fairfield
  • Ohio
  • 45014
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CINFNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDDec 1972
CCJDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972
0HYELSE (London Stock Exchange)YesCommon StockGBUSDDec 1972
CINF34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 0.5 COM USD2.00BRBRLMay 2019

Biography

Cincinnati Financial Corporation, together with its subsidiary, provides property casualty insurance products in the United States. The company operates in five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments. The Commercial Lines Insurance segment provides coverage for commercial casualty, commercial property, commercial auto, and workers’ compensation. It also offers director and officer liability insurance, contract and commercial surety bonds, and fidelity bonds; coverage for property, liability, and business interruption; and machinery and equipment coverage. The Personal Lines Insurance segment provides personal auto insurance; homeowners insurance; and dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. The Excess and Surplus Lines Insurance segment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products; and commercial property insurance, which insures buildings, inventory, equipment, and business income from loss or damage due to various causes, such as fire, wind, hail, water, theft, and vandalism. The Life Insurance segment provides term life insurance products; universal life insurance products; worksite products, such as term life, whole life, and disability insurance; and whole life insurance products, as well as markets deferred annuities and immediate annuities. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, and redeemable preferred stocks; and equity investments comprising common and nonredeemable preferred stocks. The company also offers commercial leasing and financing services; and insurance brokerage services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 22:47
End of Day Share Price2020/02/07 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.