Cincinnati Financial (NASDAQ:CINF) versus W. R. Berkley (NYSE:WRB) Head-To-Head Comparison

Cincinnati Financial (NASDAQ:CINFGet Rating) and W. R. Berkley (NYSE:WRBGet Rating) are both large-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitability, valuation, analyst recommendations and risk.

Analyst Recommendations

This is a summary of recent ratings and target prices for Cincinnati Financial and W. R. Berkley, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Financial 0 2 1 0 2.33
W. R. Berkley 0 3 7 0 2.70

Cincinnati Financial presently has a consensus price target of $131.33, indicating a potential upside of 4.04%. W. R. Berkley has a consensus price target of $67.30, indicating a potential downside of 0.04%. Given Cincinnati Financial’s higher probable upside, research analysts plainly believe Cincinnati Financial is more favorable than W. R. Berkley.

Dividends

Cincinnati Financial pays an annual dividend of $2.76 per share and has a dividend yield of 2.2%. W. R. Berkley pays an annual dividend of $0.35 per share and has a dividend yield of 0.5%. Cincinnati Financial pays out 21.9% of its earnings in the form of a dividend. W. R. Berkley pays out 7.1% 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 has raised its dividend for 62 consecutive years and W. R. Berkley has raised its dividend for 21 consecutive years. Cincinnati Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Cincinnati Financial and W. R. Berkley’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cincinnati Financial $9.63 billion 2.10 $2.95 billion $12.59 10.03
W. R. Berkley $9.46 billion 1.89 $1.02 billion $4.96 13.57

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

Risk and Volatility

Cincinnati Financial has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, W. R. Berkley has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Cincinnati Financial 23.82% 8.79% 3.54%
W. R. Berkley 13.55% 15.77% 3.35%

Institutional & Insider Ownership

66.3% of Cincinnati Financial shares are held by institutional investors. Comparatively, 49.9% of W. R. Berkley shares are held by institutional investors. 3.0% of Cincinnati Financial shares are held by company insiders. Comparatively, 22.3% of W. R. Berkley shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Cincinnati Financial beats W. R. Berkley on 10 of the 17 factors compared between the two stocks.

Cincinnati Financial Company Profile (Get Rating)

Cincinnati Financial Corporation, together with its subsidiaries, provides property casualty insurance products in the United States. The company operates through five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments. The Commercial Lines Insurance segment offers coverage for commercial casualty, commercial property, commercial auto, and workers' compensation. It also provides director and officer liability insurance, contract and commercial surety bonds, and fidelity bonds; and machinery and equipment coverage. The Personal Lines Insurance segment offers personal auto insurance; homeowner insurance; and dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. The Excess and Surplus Lines Insurance segment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products; and commercial property insurance, which insures buildings, inventory, equipment, and business income from loss or damage due to various causes, such as fire, wind, hail, water, theft, and vandalism. The Life Insurance segment provides term life insurance products; universal life insurance products; worksite products, such as term life; and whole life insurance products. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, and redeemable preferred stocks; and equity investments comprising common and nonredeemable preferred stocks. The company also offers commercial leasing and financing services; and insurance brokerage services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.

W. R. Berkley Company Profile (Get Rating)

W. R. Berkley Corporation, an insurance holding company, operates as a commercial lines writer in the United States and internationally. It operates in two segments, Insurance and Reinsurance & Monoline Excess. The Insurance segment underwrites commercial insurance business, including premises operations, commercial automobile, property, products liability, and general and professional liability lines. It also provides workers' compensation insurance products; accident and health insurance and reinsurance products; insurance for commercial risks; specialty environmental products for contractors, consultants, and property owners and facilities operators; specialized insurance coverages for fine arts and jewelry exposures; umbrella and excess liability coverage products; and liquor liability and inland marine coverage for small to medium-sized insureds. In addition, this segment offers directors and officers, and surety risk products, as well as products for technology, and life sciences and travel industries; cyber risk solutions; casualty, group life, and crime and fidelity related insurance products; personal lines insurance solutions, including home, condo/co-op, auto, and collectibles; automobile, law enforcement, public officials and educator's legal, and employment practices liability, as well as incidental medical insurance products; and at-risk and alternative risk insurance program management services. The Reinsurance & Monoline Excess segment provides other insurance companies and self-insureds with assistance in managing their net risk through reinsurance on a portfolio basis through treaty reinsurance or on an individual basis through facultative reinsurance. W. R. Berkley Corporation was founded in 1967 and is based in Greenwich, Connecticut.

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