Financial Analysis: Cincinnati Financial Corporation (CINF) and Alleghany Corporation (NYSE:Y)

Alleghany Corporation (NYSE: Y) and Cincinnati Financial Corporation (NASDAQ:CINF) are both mid-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Valuation & Earnings

This table compares Alleghany Corporation and Cincinnati Financial Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alleghany Corporation $6.16 billion 1.42 $888.24 million $30.86 18.38
Cincinnati Financial Corporation $5.62 billion 2.07 $889.00 million $3.02 23.52

Cincinnati Financial Corporation has higher revenue, but lower earnings than Alleghany Corporation. Alleghany Corporation 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.

Profitability

This table compares Alleghany Corporation and Cincinnati Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alleghany Corporation 7.74% 5.70% 1.93%
Cincinnati Financial Corporation 8.93% 5.91% 2.05%

Dividends

Cincinnati Financial Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.8%. Alleghany Corporation does not pay a dividend. Cincinnati Financial Corporation pays out 66.2% of its earnings in the form of a dividend. Cincinnati Financial Corporation has raised its dividend for 56 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for Alleghany Corporation and Cincinnati Financial Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alleghany Corporation 0 1 1 0 2.50
Cincinnati Financial Corporation 0 4 1 0 2.20

Alleghany Corporation currently has a consensus price target of $625.00, indicating a potential upside of 10.18%. Cincinnati Financial Corporation has a consensus price target of $77.33, indicating a potential upside of 8.87%. Given Alleghany Corporation’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Alleghany Corporation is more favorable than Cincinnati Financial Corporation.

Insider & Institutional Ownership

81.5% of Alleghany Corporation shares are held by institutional investors. Comparatively, 62.9% of Cincinnati Financial Corporation shares are held by institutional investors. 4.0% of Alleghany Corporation shares are held by insiders. Comparatively, 9.3% of Cincinnati Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Alleghany Corporation has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Cincinnati Financial Corporation has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Summary

Cincinnati Financial Corporation beats Alleghany Corporation on 9 of the 16 factors compared between the two stocks.

Alleghany Corporation Company Profile

Alleghany Corporation is an insurance holding company. The Company, through its subsidiary Alleghany Insurance Holdings LLC (AIHL) and its subsidiaries, is engaged in the property and casualty insurance business. AIHL’s insurance operations are conducted by its subsidiaries RSUI Group, Inc. (RSUI), CapSpecialty, Inc. (CapSpecialty) and Pacific Compensation Corporation (PacificComp). Its segments include reinsurance and insurance. Its reinsurance segment consists of property and casualty reinsurance operations conducted by Transatlantic Holdings, Inc. reinsurance operating subsidiaries. Its insurance segment consists of property and casualty insurance operations conducted by AIHL through its insurance operating subsidiaries RSUI, CapSpecialty and PacificComp. AIHL Re LLC, which is a captive reinsurance company, provides reinsurance to its insurance operating subsidiaries and affiliates.

Cincinnati Financial Corporation Company Profile

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.

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

Leave a Reply