Comparing The Travelers Companies (TRV) and Cincinnati Financial Corporation (NASDAQ:CINF)

Cincinnati Financial Corporation (NASDAQ: CINF) and The Travelers Companies (NYSE:TRV) are both large-cap property & casualty insurance – nec companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Institutional & Insider Ownership

62.5% of Cincinnati Financial Corporation shares are held by institutional investors. Comparatively, 77.6% of The Travelers Companies shares are held by institutional investors. 9.3% of Cincinnati Financial Corporation shares are held by insiders. Comparatively, 0.8% of The Travelers Companies shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Cincinnati Financial Corporation and The Travelers Companies, as provided by MarketBeat.com.

Sell RatingsHold RatingsBuy RatingsStrong Buy RatingsRating Score
Cincinnati Financial Corporation04102.20
The Travelers Companies47702.17

Cincinnati Financial Corporation currently has a consensus price target of $77.33, suggesting a potential upside of 5.09%. The Travelers Companies has a consensus price target of $127.56, suggesting a potential downside of 2.48%. Given Cincinnati Financial Corporation’s stronger consensus rating and higher possible upside, research analysts plainly believe Cincinnati Financial Corporation is more favorable than The Travelers Companies.

Dividends

Cincinnati Financial Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. The Travelers Companies pays an annual dividend of $2.88 per share and has a dividend yield of 2.2%. Cincinnati Financial Corporation pays out 66.0% of its earnings in the form of a dividend. The Travelers Companies pays out 33.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cincinnati Financial Corporation has increased its dividend for 56 consecutive years and The Travelers Companies has increased its dividend for 8 consecutive years. Cincinnati Financial Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Cincinnati Financial Corporation and The Travelers Companies’ net margins, return on equity and return on assets.

Net MarginsReturn on EquityReturn on Assets
Cincinnati Financial Corporation8.93%5.85%2.03%
The Travelers Companies8.56%9.87%2.28%

Volatility and Risk

Cincinnati Financial Corporation has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, The Travelers Companies has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.

Earnings & Valuation

This table compares Cincinnati Financial Corporation and The Travelers Companies’ gross revenue, earnings per share and valuation.

Gross RevenuePrice/Sales RatioNetIncomeEarnings Per SharePrice/Earnings Ratio
Cincinnati Financial Corporation$5.45 billion2.22$591.00 million$3.0324.29
The Travelers Companies$27.63 billion1.30$3.01 billion$8.6515.12

The Travelers Companies has higher revenue and earnings than Cincinnati Financial Corporation. The Travelers Companies is trading at a lower price-to-earnings ratio than Cincinnati Financial Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

The Travelers Companies beats Cincinnati Financial Corporation on 9 of the 17 factors compared between the two stocks.

About Cincinnati Financial Corporation

Cincinnati Financial Corporation is an insurance holding company. It operates through five segments: Commercial lines insurance, Personal lines insurance, Excess and surplus lines insurance, and Life insurance and Investments. Its Commercial Lines Insurance Segment provides five commercial business lines: commercial casualty, commercial property, commercial auto, workers’ compensation and other commercial lines. Its personal lines property insurance segment writes personal lines coverage in accounts that include both auto and homeowner coverages, as well as coverages that are part of its other personal business line. The excess and surplus lines Insurance segment covers business risks with characteristics, such as the nature of the business or its claim history that are difficult to profitably insure in the standard commercial lines market. The life insurance business lines include term life insurance, universal life insurance, worksite products and whole life insurance.

About The Travelers Companies

The Travelers Companies, Inc. is a holding company. The Company’s segments include Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Through its subsidiaries, it provides commercial and personal property and casualty insurance products and services. The Business and International Insurance segment offers property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil and throughout other parts of the world. The Bond & Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The Personal Insurance segment writes a range of property and casualty insurance covering individuals’ personal risks.




Receive News & Ratings for Cincinnati Financial Corporation Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Cincinnati Financial Corporation and related companies with MarketBeat.com’s FREE daily email newsletter.

Leave a Reply