Cincinnati Financial Corp (NASDAQ:CINF)

geat div 51 yrs - consecutive increase

I didn't even back-test this theory with the 1970's (maybe you could do that), but I'm picking dividend aristocrats/champions/whatever they're called to outperform through stagflation.

Insider buying and good dividend payer.

A nice strong dividend legend. Pays out great, there will always be a need for insurance, and Cincinnati Financial is definitely a seasoned vet is any economy, and has been rewarding it's shareholders year after year. It has gotten shaken up by a few tornadoes recently, but it'll soon regain it's composure and walk right through them. I like CINF long.

Sean Williams

Insurers don't get much better than Cincinnati Financial. The company began paying a quarterly dividend to shareholders in 1954 and hasn't lowered its quarterly distribution since 1960. Currently yielding 5.4%, Cincinnati Financial is one of the highest-yielding dividend aristocrats and one of the more secure dividends in the sector. Let's take a closer look at how it's able to sustain this tantalizing dividend.

If you base everything just on last quarter's results, you'd be sorely disappointed. Last quarter marked the second highest catastrophe losses the company has seen in the past 12 years and is the primary culprit as to why its combined ratio -- essentially a measure of how profitable it was for an insurer to underwrite policies -- was in excess of 100 in most of its business segments. A figure over 100 indicates that it was unprofitable to write policies during that period. However, if you look at Cincinnati Financial's historical performance, this is an anomaly.

The real gem behind this dividend growth story is the company's aggressive, yet still prudent, approach to investing. With $12 billion on its balance sheet, Cincinnati Financial has taken to putting 26% of its portfolio -- a figure far and away higher than many of its peers -- into dividend-paying equities. The remaining cash is predominantly divided among high-rated bonds. While this is an approach that could be problematic if the market suffers a meltdown like we saw in 2008, its portfolio should easily outpace many of its peers' based on investment returns.

Top Dividend Stock

Dividend aristocrat with a low dividend payout ratio makes this stock a strong performer as it can obviously weather recessions and booms while continuously raising its dividend.

It's really hard to go wrong with the insurance business. If your underwriting is conservative, which CINF's is, then insurance is one of the most profitable business models in existence. Statistically speaking, there's practically no way you lose money.

Solid company, great dividend.

I finally started a small position (50 shares) today. I picked it much lower on CAPS but there was such a glut of awesome dividend paying companies that an insurance company wasn't worth the risk, especially one so heavily invested in equities. Since the runup from 2009, most companies I follow have appreciated too much that they don't meet my criteria for a new position. CINF is still trading below book value, has an above average yield that is only 50% of FCF and they have raised it every year for 50 years. The last raise was small but I expect the increases to grow in size as the economy continues to recover and their substantial (25% of float) equities investments keep growing.

Am I missing something? 5.9% yield while the payout ratio is only 55%, and its trading under book value, and has a low P/E? It seems to good to be true

With a P/E under 11 and a yield above 5% now seems like a good time to buy this one.

Good value. Solid dividend (kept dividend during recent downturn)

Assuming the December 2008 earnings come out to 0, that is still annual EPS of $1.60. Using that number with the Graham formula, along with the current book value of $28,86, gives me a fair value of $32.23 -- so the current price of $22 gives me a margin of safety of 30%.

Granted, the current climate for financial companies is tough, but this seems to be a well-managed company. Time will tell if this is a wise choice.

full disclosure is due...

although my start price indicates $30 i actually bought back at $40...yeah i know...i'm a genius

(is there a way to input your actual purchase prices?)

CINF is an insurance company that is actually profitable from the sale of their policies, which is rare in the insurance industry. (most insurance companies make all of their profits off of the cash they invest that they hold in float) They have taken a big hit from flooding, tornados and weather issues in the Midwest and are going to take a loss this year on their underwriting. Like Berkshire Hathaway they invest their float in more risky investments to produce larger returns on the float. Which I find very attractive. CINF's investing strategy consists of stocks that provide large dividends and have potential for continuing growth. If you look at their investments over the long term the gains are very impressive. (check out there 10k) They have taken losses in the year due to heavy investmenting in the financial sector, mainly Fifth Third Bank, which has recently been hammered. It was a poor move to not sell some of these investments and cut their losses but then again many have made the same mistake. On a side note the CEO also sits on the board of Fifth Third Bank Corp. which is a tad bit fishy seeing as 27% of their stock holdings are in 5/3. Financials will inevitably bounce back within the next few years as will the rest of the market putting CINF's profits back in line with past performance. Cincinnati Financial Corp. is a solid company that has been around for 48 years and has strong experienced management. They have been increasing their dividend every year since the inception of the company. I believe the company is currently underpriced and a solid value buy in the $25 range.

I think they are going to start losing profits as insurance companies struggle with the mess lenders have left them. they may come up ahead in the long run, but for now i think they are going to continue falling.

A lot of bad, general sector, news is priced into this stock - but I believe this a good long term. If for nothing else at these prices would be a good target for acquisition.

This Insurance player is underpriced and has been hit overly hard through the credit crunch. We will see sentiment shift on this as it beats earnings expectations over the next year.