Chubb vs Cincinnati Financial Which Is a Better Investment?

Chubb Limited and Cincinnati Financial Corporation are two prominent insurance companies in the United States. Chubb is known for its global presence and diverse portfolio of insurance products, while Cincinnati Financial focuses primarily on property and casualty coverage. Both companies have strong financial standings and solid track records of consistent growth. Investors looking to add insurance stocks to their portfolio may consider comparing Chubb and Cincinnati Financial for potential investment opportunities.

Chubb or Cincinnati Financial?

When comparing Chubb and Cincinnati Financial, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Chubb and Cincinnati Financial.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Chubb has a dividend yield of 1.3%, while Cincinnati Financial has a dividend yield of 2.09%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Chubb reports a 5-year dividend growth of 3.29% year and a payout ratio of 14.19%. On the other hand, Cincinnati Financial reports a 5-year dividend growth of 7.19% year and a payout ratio of 15.67%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Chubb P/E ratio at 11.15 and Cincinnati Financial's P/E ratio at 7.74. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Chubb P/B ratio is 1.70 while Cincinnati Financial's P/B ratio is 1.72.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Chubb has seen a 5-year revenue growth of 0.72%, while Cincinnati Financial's is 0.92%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Chubb's ROE at 16.20% and Cincinnati Financial's ROE at 23.92%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $275.00 for Chubb and $151.78 for Cincinnati Financial. Over the past year, Chubb's prices ranged from $216.91 to $302.05, with a yearly change of 39.25%. Cincinnati Financial's prices fluctuated between $100.31 and $161.75, with a yearly change of 61.25%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.