Analyzing Crawford & Company (NYSE:CRD.B) and Cincinnati Financial (NASDAQ:CINF)

Cincinnati Financial (NASDAQ:CINF) and Crawford & Company (NYSE:CRD.B) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Dividends

Cincinnati Financial pays an annual dividend of $3.76 per share and has a dividend yield of 2.0%. Crawford & Company pays an annual dividend of $0.32 per share and has a dividend yield of 2.9%. Cincinnati Financial pays out 22.1% of its earnings in the form of a dividend. Crawford & Company pays out 59.3% 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 raised its dividend for 65 consecutive years.

Insider & Institutional Ownership

65.2% of Cincinnati Financial shares are held by institutional investors. Comparatively, 11.0% of Crawford & Company shares are held by institutional investors. 2.9% of Cincinnati Financial shares are held by insiders. Comparatively, 51.0% of Crawford & Company shares are held 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.

Risk & Volatility

Cincinnati Financial has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500. Comparatively, Crawford & Company has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Valuation & Earnings

This table compares Cincinnati Financial and Crawford & Company”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cincinnati Financial	$12.63 billion	2.31	$2.39 billion	$17.05	11.17
Crawford & Company	$1.31 billion	0.42	$19.63 million	$0.54	20.73

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

Profitability

This table compares Cincinnati Financial and Crawford & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cincinnati Financial	20.07%	9.48%	3.64%
Crawford & Company	2.01%	29.17%	6.80%

Analyst Recommendations

This is a summary of current ratings and price targets for Cincinnati Financial and Crawford & Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cincinnati Financial	0	3	1	1	2.60
Crawford & Company	0	1	0	0	2.00

Cincinnati Financial currently has a consensus price target of $191.60, indicating a potential upside of 0.59%. Given Cincinnati Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Cincinnati Financial is more favorable than Crawford & Company.

Summary

Cincinnati Financial beats Crawford & Company on 13 of the 18 factors compared between the two stocks.

About Cincinnati Financial

Cincinnati Financial Corporation, together with its subsidiaries, provides property casualty insurance products in the United States. It 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 contract and commercial surety bonds, and fidelity bonds; and machinery and equipment. 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, as well as other coverages, including miscellaneous errors and omissions, professional liability, and excess liability; 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, as well as annuities. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, redeemable preferred stocks, and mortgage-backed securities; and equity investments comprising common and nonredeemable preferred stocks. It also offers commercial leasing and financing services; and insurance brokerage services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.

About Crawford & Company

Crawford & Co. engages in the provision of claims management and outsourcing solutions to carriers, brokers, and corporates. It operates through the following segments: Crawford Loss Adjusting, Crawford TPA Solutions, and Crawford Platform Solutions. The Crawford Loss Adjusting segment consists of adjusting services provided to insurance companies and self-insured entities related to property and casualty losses caused by physical damage to commercial and residential real property and certain types of personal property. The Crawford TPA Solutions segment provides third party administration for workers’ compensation, auto and liability, disability absence management, medical management, and accident and health to corporations, brokers, and insurers worldwide. The Crawford Platform Solutions segment is involved in the management of contractor networks and the provision of claims management services to insurance companies and self-insured entities related to property, casualty, and catastrophic losses. The company was founded by Jim Crawford in 1941 and is headquartered in Peachtree Corners, GA.