United Insurance Holdings Corp. (NASDAQ: UIHC) and Cincinnati Financial Corporation (NASDAQ:CINF) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, dividends, profitability and institutional ownership.

Dividends

United Insurance Holdings Corp. pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Cincinnati Financial Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. United Insurance Holdings Corp. pays out -30.0% of its earnings in the form of a dividend. Cincinnati Financial Corporation pays out 66.0% 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 Corporation has increased its dividend for 56 consecutive years. Cincinnati Financial Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for United Insurance Holdings Corp. and Cincinnati Financial Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Insurance Holdings Corp. 0 1 2 1 3.00
Cincinnati Financial Corporation 0 4 1 0 2.20

United Insurance Holdings Corp. presently has a consensus price target of $18.00, indicating a potential upside of 14.87%. Cincinnati Financial Corporation has a consensus price target of $77.33, indicating a potential upside of 5.27%. Given United Insurance Holdings Corp.’s stronger consensus rating and higher probable upside, analysts plainly believe United Insurance Holdings Corp. is more favorable than Cincinnati Financial Corporation.

Risk and Volatility

United Insurance Holdings Corp. has a beta of 1.54, meaning that its stock price is 54% more volatile than the S&P 500. Comparatively, Cincinnati Financial Corporation has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Profitability

This table compares United Insurance Holdings Corp. and Cincinnati Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Insurance Holdings Corp. -4.54% -2.29% -0.58%
Cincinnati Financial Corporation 8.93% 5.85% 2.03%

Valuation and Earnings

This table compares United Insurance Holdings Corp. and Cincinnati Financial Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
United Insurance Holdings Corp. $487.12 million 1.38 $5.69 million ($0.80) -19.59
Cincinnati Financial Corporation $5.45 billion 2.21 $591.00 million $3.03 24.24

Cincinnati Financial Corporation has higher revenue and earnings than United Insurance Holdings Corp.. United Insurance Holdings Corp. 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.

Insider and Institutional Ownership

29.0% of United Insurance Holdings Corp. shares are owned by institutional investors. Comparatively, 62.5% of Cincinnati Financial Corporation shares are owned by institutional investors. 22.6% of United Insurance Holdings Corp. shares are owned by insiders. Comparatively, 9.3% of Cincinnati Financial Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Cincinnati Financial Corporation beats United Insurance Holdings Corp. on 10 of the 17 factors compared between the two stocks.

United Insurance Holdings Corp. Company Profile

United Insurance Holdings Corp. is a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies using a network of agents and a group of insurance subsidiaries. The Company’s insurance subsidiary is United Property & Casualty Insurance Company. Its other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of United Property & Casualty Insurance Company’s business; Skyway Claims Services, LLC, which provides services to its insurance affiliate; UPC Re, which provides a portion of the reinsurance protection purchased by its insurance affiliate. The Company’s principal product is homeowners’ insurance, which it offers in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas.

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.

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