Cincinnati Financial (NASDAQ:CINF) and Conifer (CNFR) Critical Contrast

Cincinnati Financial (NASDAQ: CINF) and Conifer (NASDAQ:CNFR) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Dividends

Cincinnati Financial pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. Conifer does not pay a dividend. Cincinnati Financial pays out 31.7% of its earnings in the form of a dividend. Cincinnati Financial has raised its dividend for 57 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Cincinnati Financial 18.23% 5.99% 2.13%
Conifer -27.29% -43.07% -12.67%

Insider & Institutional Ownership

64.5% of Cincinnati Financial shares are held by institutional investors. Comparatively, 28.1% of Conifer shares are held by institutional investors. 9.3% of Cincinnati Financial shares are held by company insiders. Comparatively, 45.5% of Conifer shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Cincinnati Financial and Conifer’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cincinnati Financial $5.73 billion 2.13 $1.05 billion $6.30 11.80
Conifer $93.88 million 0.52 -$8.43 million ($3.42) -1.67

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

Volatility and Risk

Cincinnati Financial has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Conifer has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Cincinnati Financial and Conifer, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Financial 0 3 0 0 2.00
Conifer 0 1 0 0 2.00

Cincinnati Financial presently has a consensus price target of $71.00, suggesting a potential downside of 4.45%. Given Cincinnati Financial’s higher possible upside, analysts clearly believe Cincinnati Financial is more favorable than Conifer.

Summary

Cincinnati Financial beats Conifer on 12 of the 15 factors compared between the two stocks.

About Cincinnati Financial

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 Conifer

Conifer Holdings, Inc. is an insurance holding company. Through its insurance company subsidiaries, the Company offers insurance coverage in both specialty commercial and specialty personal product lines. It operates through two segments: commercial lines and personal lines. It is engaged in underwriting and marketing insurance coverage, and administering claims processing for such policies. The Company offers coverage for property, liability, automobile, and other miscellaneous coverage primarily to owner-operated small and mid-sized businesses, professional organizations and hospitality businesses, such as restaurants, bars and taverns. The Company offers coverage for low-value dwelling, wind-exposed homeowners and automobile. Its personal lines products include Catastrophe coverage, including hurricane and wind coverage, to underserved homeowners in Florida, Hawaii and Texas, and Dwelling insurance.

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