WR Berkeley (NYSE: WRB – Get a rating) and Cincinnati Financial (NASDAQ: CINF – Get a rating) are both large-cap financial companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.
This table compares the net margins, return on equity and return on assets of WR Berkley and Cincinnati Financial.
|Net margins||Return on equity||return on assets|
Insider and Institutional Ownership
49.9% of WR Berkley shares are held by institutional investors. By comparison, 66.3% of Cincinnati Financial’s stock is held by institutional investors. 22.4% of WR Berkley’s stock is held by insiders of the company. By comparison, 3.0% of Cincinnati Financial’s stock is held by insiders of the company. Strong institutional ownership indicates that hedge funds, large fund managers, and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
WR Berkley has a beta of 0.75, suggesting its stock price is 25% less volatile than the S&P 500. By comparison, Cincinnati Financial has a beta of 0.67, suggesting its stock price is 33% less volatile than the S&P 500.
This is a summary of current recommendations and price targets for WR Berkley and Cincinnati Financial, as provided by MarketBeat.com.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
WR Berkley currently has a consensus target price of $67.30, suggesting a potential upside of 0.10%. Cincinnati Financial has a consensus target price of $131.33, suggesting a potential upside of 5.05%. Given Cincinnati Financial’s possible higher upside, analysts clearly think Cincinnati Financial is more favorable than WR Berkley.
Valuation and benefits
This chart compares revenue, earnings per share (EPS), and valuation of WR Berkley and Cincinnati Financial.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|WR Berkeley||$9.46 billion||1.89||$1.02 billion||$4.96||1:55 p.m.|
|Cincinnati Financial||$9.63 billion||2.08||$2.95 billion||$12.59||9.93|
Cincinnati Financial has higher revenue and profits than WR Berkley. Cincinnati Financial is trading at a lower price-to-earnings ratio than WR Berkley, indicating that it is currently the more affordable of the two stocks.
WR Berkley pays an annual dividend of $0.35 per share and has a dividend yield of 0.5%. Cincinnati Financial pays an annual dividend of $2.76 per share and has a dividend yield of 2.2%. WR Berkley pays 7.1% of its earnings as a dividend. Cincinnati Financial pays 21.9% 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. WR Berkley has increased its dividend for 21 consecutive years and Cincinnati Financial has increased its dividend for 62 consecutive years. Cincinnati Financial is clearly the better dividend-paying stock, given its higher yield and longer track record of dividend growth.
Cincinnati Financial beats WR Berkley on 10 of 17 factors compared between the two stocks.
WR Berkley Company Profile (Get a rating)
WR Berkley Corporation, an insurance holding company, operates as a commercial line writer in the United States and abroad. It operates in two segments, Insurance and Reinsurance & Monoline Excess. The Insurance segment underwrites commercial insurance business, including premises operations, commercial automobile, property, product liability, and general and professional liability. It also provides workers’ compensation insurance products; accident and sickness insurance and reinsurance products; business risk insurance; specialty environmental products for contractors, consultants, landowners and facility operators; specialized insurance coverage for exhibitions related to fine arts and jewellery; umbrella and excess liability insurance products; and alcohol liability and domestic marine coverage for small and medium insureds. Additionally, this segment offers directors and officers and bonding risk products, as well as products for the technology, life sciences and travel industries; cyber risk solutions; liability, group life, crime and embezzlement insurance products; personal insurance solutions, including home, condo/co-op, auto and collectibles; automobile, law enforcement, government and educator liability, liability and employment practices, and accidental medical insurance products; and risk and alternative risk insurance program management services. The Reinsurance & Monoline Excess segment provides other insurance companies and self-insured with assistance in managing their net risk through reinsurance on a portfolio basis via conventional reinsurance or on an individual basis via facultative reinsurance . WR Berkley Corporation was founded in 1967 and is based in Greenwich, Connecticut.
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.
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