Head to Head Comparison: Cincinnati Financial (NASDAQ:CINF) and Skyward Specialty Insurance Group (NASDAQ:SKWD)

Skyward Specialty Insurance Group (NASDAQ:SKWD) and Cincinnati Financial (NASDAQ:CINF) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Profitability

This table compares Skyward Specialty Insurance Group and Cincinnati Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Skyward Specialty Insurance Group	10.53%	16.84%	3.62%
Cincinnati Financial	15.59%	7.14%	2.66%

Insider and Institutional Ownership

94.8% of Skyward Specialty Insurance Group shares are owned by institutional investors. Comparatively, 65.2% of Cincinnati Financial shares are owned by institutional investors. 7.9% of Skyward Specialty Insurance Group shares are owned by company insiders. Comparatively, 2.8% of Cincinnati Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Skyward Specialty Insurance Group and Cincinnati Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Skyward Specialty Insurance Group	$1.15 billion	1.72	$118.83 million	$3.18	15.38
Cincinnati Financial	$11.34 billion	2.07	$2.29 billion	$11.53	13.00

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

Volatility and Risk

Skyward Specialty Insurance Group has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500. Comparatively, Cincinnati Financial has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Skyward Specialty Insurance Group and Cincinnati Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Skyward Specialty Insurance Group	0	3	7	1	2.82
Cincinnati Financial	0	1	4	0	2.80

Skyward Specialty Insurance Group currently has a consensus target price of $60.8750, suggesting a potential upside of 24.46%. Cincinnati Financial has a consensus target price of $159.40, suggesting a potential upside of 6.35%. Given Skyward Specialty Insurance Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Skyward Specialty Insurance Group is more favorable than Cincinnati Financial.

Summary

Skyward Specialty Insurance Group beats Cincinnati Financial on 9 of the 15 factors compared between the two stocks.

About Skyward Specialty Insurance Group

Skyward Specialty Insurance Group, Inc., an insurance holding company, underwrites commercial property and casualty insurance products in the United States. It offers general liability, excess liability, professional liability, commercial auto, group accident and health, property, surety, and workers' compensation insurance products. Skyward Specialty Insurance Group, Inc. was incorporated in 2006 and is headquartered in Houston, Texas.

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.