Cincinnati Financial Corp (NASDAQ: CINF)

Sector: Financial Services Industry: Insurance - Property & Casualty CIK: 0000020286
Market Cap 26.91 Bn
P/B 5.02
P/E 74.14
P/S 6.73
ROIC (Qtr) 13.48
Div Yield % 1.50
Rev 1y % (Qtr) 12.23
Total Debt (Qtr) 883.00 Mn
Debt/Equity (Qtr) 0.06
Add ratio to table...

About

Investment thesis

Bull case

  • Strong operating cash flow of 2.81B provides robust 3.18x coverage of total debt 883M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 40.57B provides 45.94x coverage of total debt 883M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 2.81B provides exceptional 52.96x coverage of interest expenses 53M, showing strong debt service capability.
  • Tangible assets of 40.57B provide exceptional 7.48x coverage of deferred revenue 5.42B, showing strong service capability backing.
  • Robust free cash flow of 2.79B exceeds capital expenditure of 16M by 174.44x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 2.81B barely covers its investment activities of (2.22B), with a coverage ratio of -1.26, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.81B provides thin coverage of dividend payments of (517M) with a -5.43 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 2.81B provides insufficient coverage of deferred revenue obligations of 5.42B, which is 0.52x, raising concerns about future service delivery capabilities.
  • Retained earnings of 16.18B provide limited buffer against comprehensive income items of (84M), which is -192.61x, indicating elevated exposure to market risks.
  • Operating cash flow of 2.81B is outpaced by equity issuance of (96M) (-29.24 ratio), indicating concerning reliance on equity markets for funding operations.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Insurance - Property & Casualty
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PGR Progressive Corp/Oh/ 121.46 Bn 30.80 3.11 6.90 Bn
2 CB Chubb Ltd 109.27 Bn 36.88 5.64 21.01 Bn
3 ALL Allstate Corp 69.21 Bn 29.01 1.62 8.09 Bn
4 TRV Travelers Companies, Inc. 67.61 Bn 10.75 1.38 9.27 Bn
5 HIG Hartford Insurance Group, Inc. 61.19 Bn 37.09 3.27 4.37 Bn
6 WRB Berkley W R Corp 38.52 Bn 124.63 8.69 2.87 Bn
7 CINF Cincinnati Financial Corp 26.91 Bn 74.14 6.73 0.88 Bn
8 MKL Markel Group Inc. 26.46 Bn 13.00 1.68 4.28 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.68 0.50
EV to Cash from Ops. EV/CFO 51.85 -16.03
EV to Debt EV to Debt 31.24 11.42
EV to EBIT EV/EBIT 51.66 22.13
EV to EBITDA EV/EBITDA 48.39 17.53
EV to Free Cash Flow [EV/FCF] EV/FCF 51.85 68.07
EV to Market Cap EV to Market Cap 1.02 0.91
EV to Revenue EV/Rev 6.90 2.31
Price to Book Value [P/B] P/B 5.02 2.97
Price to Earnings [P/E] P/E 74.14 29.62
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.10 7.41
Dividend Payout Ratio % Div Payout % (Qtr) 25.20 19.66
Dividend per Basic Share Div per Share (Qtr) 3.42 1.49
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 19.16 37.69
Interest Coverage Int. cover (Qtr) 50.42 -9.19
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 38.46 -17.83
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -16.67 30.27
Dividend Growth (1y) % Div 1y % (Qtr) 7.55 16.34
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -30.45 62.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -30.75 35.62
EBIT Growth (1y) % EBIT 1y % (Qtr) -31.89 56.25
EBT Growth (1y) % EBT 1y % (Qtr) -32.31 52.70
EPS Growth (1y) % EPS 1y % (Qtr) -30.66 48.20
FCF Growth (1y) % FCF 1y % (Qtr) 9.11 15.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.73 16.55
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.30 0.38
Cash Payout Ratio Cash Payout (Qtr) 0.18 0.45
Cash Ratio Cash Ratio 0.00 0.02
Current Ratio Current Ratio 0.00 0.06
Debt to Equity Ratio Debt/Equity (Qtr) 0.06 0.23
Interest Cover Ratio Int Coverage (Qtr) 50.42 -9.19
Times Interest Earned Times Interest Earned (Qtr) 50.42 -9.19
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 23.30 14.01
EBIT Margin % EBIT Margin % (Qtr) 22.12 13.05
EBT Margin % EBT Margin % (Qtr) 21.68 12.25
Gross Margin % Gross Margin % (Qtr) 46.20 40.49
Net Profit Margin % Net Margin % (Qtr) 17.60 9.63