The Travelers Companies (NYSE: TRV) and Cincinnati Financial Corporation (NASDAQ:CINF) are both large-cap financials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.
Institutional and Insider Ownership
78.1% of The Travelers Companies shares are held by institutional investors. Comparatively, 62.2% of Cincinnati Financial Corporation shares are held by institutional investors. 0.8% of The Travelers Companies shares are held by company insiders. Comparatively, 9.3% of Cincinnati Financial Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Risk and Volatility
The Travelers Companies has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Cincinnati Financial Corporation has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.
The Travelers Companies pays an annual dividend of $2.88 per share and has a dividend yield of 2.2%. Cincinnati Financial Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.8%. The Travelers Companies pays out 33.3% of its earnings in the form of a dividend. Cincinnati Financial Corporation pays out 66.2% 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. The Travelers Companies has raised its dividend for 56 consecutive years and Cincinnati Financial Corporation has raised its dividend for 8 consecutive years.
Earnings and Valuation
This table compares The Travelers Companies and Cincinnati Financial Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|The Travelers Companies||$27.63 billion||1.29||$3.01 billion||$8.65||15.03|
|Cincinnati Financial Corporation||$5.45 billion||2.19||$591.00 million||$3.02||24.06|
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.
This table compares The Travelers Companies and Cincinnati Financial Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Travelers Companies||8.56%||9.87%||2.28%|
|Cincinnati Financial Corporation||8.93%||5.85%||2.03%|
This is a breakdown of recent ratings and price targets for The Travelers Companies and Cincinnati Financial Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Travelers Companies||3||7||7||0||2.24|
|Cincinnati Financial Corporation||0||4||1||0||2.20|
The Travelers Companies currently has a consensus target price of $127.56, indicating a potential downside of 1.88%. Cincinnati Financial Corporation has a consensus target price of $77.33, indicating a potential upside of 6.43%. Given Cincinnati Financial Corporation’s higher probable upside, analysts plainly believe Cincinnati Financial Corporation is more favorable than The Travelers Companies.
The Travelers Companies beats Cincinnati Financial Corporation on 11 of the 17 factors compared between the two stocks.
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.
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.
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