Critical Review: Kingstone Companies (NASDAQ:KINS) & Cincinnati Financial (NASDAQ:CINF)

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Cincinnati Financial (NASDAQ:CINFGet Rating) and Kingstone Companies (NASDAQ:KINSGet Rating) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Volatility and Risk

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Cincinnati Financial has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Kingstone Companies has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cincinnati Financial and Kingstone Companies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Financial 0 2 1 0 2.33
Kingstone Companies 0 1 0 0 2.00

Cincinnati Financial currently has a consensus price target of $131.33, suggesting a potential upside of 15.24%. Kingstone Companies has a consensus price target of $5.40, suggesting a potential upside of 39.53%. Given Kingstone Companies’ higher probable upside, analysts clearly believe Kingstone Companies is more favorable than Cincinnati Financial.

Earnings & Valuation

This table compares Cincinnati Financial and Kingstone Companies’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cincinnati Financial $9.63 billion 1.90 $2.95 billion $12.59 9.05
Kingstone Companies $161.23 million 0.26 -$7.38 million ($1.55) -2.50

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

Insider and Institutional Ownership

66.3% of Cincinnati Financial shares are owned by institutional investors. Comparatively, 61.8% of Kingstone Companies shares are owned by institutional investors. 3.0% of Cincinnati Financial shares are owned by insiders. Comparatively, 8.2% of Kingstone Companies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Cincinnati Financial pays an annual dividend of $2.76 per share and has a dividend yield of 2.4%. Kingstone Companies pays an annual dividend of $0.16 per share and has a dividend yield of 4.1%. Cincinnati Financial pays out 21.9% of its earnings in the form of a dividend. Kingstone Companies pays out -10.3% 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 increased its dividend for 62 consecutive years. Kingstone Companies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Cincinnati Financial and Kingstone Companies’ 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%
Kingstone Companies -10.82% -24.09% -5.72%

Summary

Cincinnati Financial beats Kingstone Companies on 11 of the 16 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.

Kingstone Companies Company Profile (Get Rating)

Kingstone Companies, Inc., through its subsidiary, Kingstone Insurance Company, underwrites property and casualty insurance products to individuals in New York. The company offers personal line of insurance products, including homeowners and dwelling fire multi-peril, cooperative/condominiums, renters, and personal umbrella policies. It also provides for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs; and canine legal liability policies, as well as reinsurance products. It sells its products through retail and wholesale agents and brokers. The company was formerly known as DCAP Group, Inc. and changed its name to Kingstone Companies, Inc. in July 2009. Kingstone Companies, Inc. was founded in 1886 and is headquartered in Kingston, New York.



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