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


Cincinnati Financial (NASDAQ: CINFGet a rating) and the Kingstone companies (NASDAQ:KINSGet a rating) are both finance companies, but which company is better? We’ll compare the two companies based on their dividend strength, risk, valuation, earnings, institutional ownership, analyst recommendations and profitability.

Volatility and risk

Cincinnati Financial has a beta of 0.67, which means its stock price is 33% less volatile than the S&P 500. In comparison, Kingstone Companies has a beta of 0.82, which means its stock 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.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Cincinnati Financial 0 2 1 0 2.33
Kingstone Businesses 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’ likely higher upside, analysts clearly believe Kingstone Companies is more favorable than Cincinnati Financial.

Benefits and evaluation

This table compares the revenue, earnings per share and valuation of Cincinnati Financial and Kingstone Companies.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Cincinnati Financial $9.63 billion 1.90 $2.95 billion $12.59 9.05
Kingstone Businesses $161.23 million 0.26 -7.38 million dollars ($1.55) -2.50

Cincinnati Financial has higher revenues and profits than Kingstone Companies. Kingstone Companies trades 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 held by institutional investors. By comparison, 61.8% of Kingstone Companies’ shares are held by institutional investors. 3.0% of Cincinnati Financial shares are held by insiders. By comparison, 8.2% of Kingstone Companies’ shares are held by insiders. Strong institutional ownership indicates that hedge funds, large fund 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 21.9% of its profits as a dividend. Kingstone Companies pays -10.3% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Cincinnati Financial has increased its dividend for 62 consecutive years. Kingstone Companies is clearly the better dividend-paying stock, given its higher yield and lower payout ratio.

Profitability

This table compares the net margins, return on equity and return on assets of Cincinnati Financial and Kingstone Companies.

Net margins Return on equity return on assets
Cincinnati Financial 23.82% 8.79% 3.54%
Kingstone Businesses -10.82% -24.09% -5.72%

Summary

Cincinnati Financial beats Kingstone Companies on 11 of 16 factors compared between the two stocks.

Cincinnati Financial Company Profile (Get a rating)

Cincinnati Financial Corporation, together with its subsidiaries, provides property and casualty insurance products in the United States. The Company operates through five segments: Commercial Insurance, Personal Insurance, Excess and Surplus Insurance, Life Insurance and Investments. The Commercial Lines Insurance segment provides coverage for commercial accident, commercial property, commercial automobile and workers’ compensation. It also provides directors’ and officers’ liability insurance, contractual and commercial bonds, and loyalty bonds; and machinery and equipment coverage. The Personal Insurance segment offers personal automobile insurance; Home Insurance; and residential fire, inland marine, personal liability and watercraft insurance for individuals. The Excess and Surplus Lines Insurance segment offers commercial liability insurance that covers companies for liability for accidents occurring on their premises or resulting from their activities, such as injuries to products; and commercial property insurance, which insures buildings, inventory, equipment and business income against loss or damage from various causes, such as fire, wind, hail, water, theft and vandalism. The Life Insurance segment offers term life insurance products; universal life insurance products; construction site products, such as temporary life; and whole life insurance products. The Investments segment invests in investments with fixed maturities, including taxable and tax-exempt bonds and redeemable preferred shares; and equity investments including common and non-redeemable preferred shares. 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.

Company Profile Kingstone Companies (Get a rating)

Kingstone Companies, Inc., through its subsidiary, Kingstone Insurance Company, underwrites personal property and casualty insurance products in New York. The Company offers a range of personal insurance products, including comprehensive homeowners and home fire, co-op/condominium, tenant, and personal umbrella policies. It also offers rental vehicle physical damage insurance policies only for service and car vehicles and taxis; and canine 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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