May 31, 2025 a 03:31 am
CINF: Dividend Analysis - Cincinnati Financial Corporation
Cincinnati Financial Corporation demonstrates a robust dividend profile with a long history of consistent payments. Its moderate, yet steady growth rate in dividends reflects reliability which can be attractive for income-focused investors. However, caution is warranted as the economic environment may impact future performance despite the solid past records.
📊 Overview
Cincinnati Financial Corporation operates within the Financial Services sector. It boasts a dividend yield of 2.23%, with a current dividend per share of 3.13 USD. Impressively, the company has maintained a stable dividend history over 42 years and has not experienced any recent cuts or suspensions.
| Indicator | Value |
|---|---|
| Sector | Financial Services |
| Dividend Yield | 2.23% |
| Current Dividend per Share | 3.13 USD |
| Dividend History | 42 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
This extensive dividend payout history highlights the company's commitment to shareholders. It serves as an important signal of financial strength and operational stability, which can be crucial for long-term investment decisions.
| Year | Dividend Per Share (USD) |
|---|---|
| 2025 | 1.74 |
| 2024 | 3.24 |
| 2023 | 3.00 |
| 2022 | 2.76 |
| 2021 | 2.52 |
📈 Dividend Growth
Dividend growth reflects a company's ability to increase payouts over time, signaling potential financial strength. Cincinnati Financial's dividend growth has been moderate but steady over the past few years, which investors may find encouraging for future payouts.
| Time | Growth |
|---|---|
| 3 years | 8.74% |
| 5 years | 7.66% |
The average dividend growth is 7.66% over 5 years. This shows moderate but steady dividend growth.
⚖️ Payout Ratio
The payout ratio is a key measure that helps assess a company's ability to maintain its dividend payments. Cincinnati Financial's payout ratios suggest a balanced approach to distribution, with an EPS-based ratio of 33.86% and a free cash flow-based ratio of 18.90%. These figures indicate that the dividends are well-covered by earnings and cash flow, presenting a sustainable profile.
| Key figure | Ratio (%) |
|---|---|
| EPS-based | 33.86% |
| Free cash flow-based | 18.90% |
💹 Cashflow & Capital Efficiency
Understanding cash flow and capital efficiency is crucial for evaluating a company's financial health and its ability to continue dividend payments. Here’s a look at some important metrics:
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 11.69% | 12.44% | 12.53% |
| Earnings Yield | 10.20% | 11.27% | -2.99% |
| CAPEX to Operating Cash Flow | 0% | 0.88% | 0.73% |
| Stock-based Compensation to Revenue | 0% | 0% | 0.54% |
| Free Cash Flow / Operating Cash Flow Ratio | 99.17% | 99.12% | 99.27% |
The cash flow metrics and capital efficiency figures suggest that Cincinnati Financial has effectively managed its resources, supporting continued dividend stability.
🛡️ Balance Sheet & Leverage Analysis
Analyzing the balance sheet and leverage ratios help determine financial stability and debt capacity. This provides insights into Cincinnati Financial's ability to meet its financial obligations and sustain dividend distributions. The data suggests a strong balance sheet with prudent leverage.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 6.28% | 7.22% | 8.44% |
| Debt-to-Assets | 2.40% | 2.67% | 2.99% |
| Debt-to-Capital | 5.91% | 6.74% | 7.78% |
| Net Debt to EBITDA | -0.04 | -0.01 | 0.73 |
| Current Ratio | 40.40 | 0 | 0 |
| Quick Ratio | 39.32 | 0 | 0 |
| Financial Leverage | 2.62 | 2.71 | 2.81 |
The leverage and liquidity ratios are indicative of strong financial positioning, reducing the risk of impending fiscal constraints.
🚀 Fundamental Strength & Profitability
Assessing fundamental strength and profitability is critical to understand the overall financial performance. Cincinnati Financial's return metrics and margin figures highlight the effectiveness of its business operations.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 16.45% | 15.23% | -4.61% |
| Return on Assets | 6.28% | 5.62% | -1.64% |
| Margins (Net) | 20.22% | 18.41% | -7.42% |
| Margins (EBIT) | 25.68% | 23.27% | -9.77% |
| Margins (EBITDA) | 25.68% | 24.39% | -7.83% |
| Margins (Gross) | 100% | 100% | 100% |
| Research & Development to Revenue | 0% | 0% | 0% |
The profitability margins and returns indicate robust operational efficiency and decision-making, suggesting a solid outlook for sustaining returns for investors.
🌐 Price Development
✅ Dividend Scoring System
| Category | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 32/40
💬 Rating
Cincinnati Financial Corporation is a commendable dividend stock with consistent payout history and solid financial standing. Despite economic uncertainties, its stable dividend and prudent financial management make it a reliable choice for income-seeking investors. However, moderate growth in dividend and the dynamic market conditions warrant a cautious approach.