Markel (NYSE:MKL) and Cincinnati Financial (NASDAQ:CINF) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.
Insider and Institutional Ownership
74.6% of Markel shares are held by institutional investors. Comparatively, 65.3% of Cincinnati Financial shares are held by institutional investors. 2.2% of Markel shares are held by company insiders. Comparatively, 7.4% of Cincinnati Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
Markel has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Cincinnati Financial has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.
Profitability
This table compares Markel and Cincinnati Financial's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Markel | 5.29% | 2.41% | 0.68% |
Cincinnati Financial | N/A | 5.14% | 1.88% |
Valuation & Earnings
This table compares Markel and Cincinnati Financial's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Markel | $9.53 billion | 1.44 | $1.79 billion | $38.91 | 25.54 |
Cincinnati Financial | $7.92 billion | 1.77 | $2.00 billion | $4.20 | 20.79 |
Cincinnati Financial has lower revenue, but higher earnings than Markel. Cincinnati Financial is trading at a lower price-to-earnings ratio than Markel, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations and price targets for Markel and Cincinnati Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Markel | 0 | 2 | 2 | 0 | 2.50 |
Cincinnati Financial | 2 | 2 | 1 | 0 | 1.80 |
Markel presently has a consensus price target of $1,137.50, indicating a potential upside of 14.46%. Cincinnati Financial has a consensus price target of $72.8333, indicating a potential downside of 16.59%. Given Markel's stronger consensus rating and higher probable upside, analysts clearly believe Markel is more favorable than Cincinnati Financial.
Summary
Markel beats Cincinnati Financial on 9 of the 14 factors compared between the two stocks.