Head-To-Head Contrast: Horace Mann Educators (HMN) and Cincinnati Financial (CINF)

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Horace Mann Educators (NYSE: HMN) and Cincinnati Financial (NASDAQ:CINF) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Horace Mann Educators and Cincinnati Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horace Mann Educators 0 1 0 0 2.00
Cincinnati Financial 0 3 0 0 2.00

Horace Mann Educators presently has a consensus target price of $43.00, indicating a potential downside of 3.59%. Cincinnati Financial has a consensus target price of $70.00, indicating a potential upside of 1.57%. Given Cincinnati Financial’s higher possible upside, analysts clearly believe Cincinnati Financial is more favorable than Horace Mann Educators.

Dividends

Horace Mann Educators pays an annual dividend of $1.14 per share and has a dividend yield of 2.6%. Cincinnati Financial pays an annual dividend of $2.12 per share and has a dividend yield of 3.1%. Horace Mann Educators pays out 65.5% of its earnings in the form of a dividend. Cincinnati Financial pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Horace Mann Educators has raised its dividend for 9 consecutive years and Cincinnati Financial has raised its dividend for 57 consecutive years. Cincinnati Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Horace Mann Educators and Cincinnati Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Horace Mann Educators $1.17 billion 1.56 $169.45 million $1.74 25.63
Cincinnati Financial $5.73 billion 1.97 $1.05 billion $2.74 25.15

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

Volatility & Risk

Horace Mann Educators has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Cincinnati Financial has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Institutional and Insider Ownership

99.1% of Horace Mann Educators shares are owned by institutional investors. Comparatively, 63.3% of Cincinnati Financial shares are owned by institutional investors. 2.2% of Horace Mann Educators shares are owned by insiders. Comparatively, 7.1% of Cincinnati Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Horace Mann Educators and Cincinnati Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horace Mann Educators 14.77% 5.53% 0.71%
Cincinnati Financial 14.96% 6.14% 2.21%

Summary

Cincinnati Financial beats Horace Mann Educators on 11 of the 15 factors compared between the two stocks.

Horace Mann Educators Company Profile

Horace Mann Educators Corporation, through its subsidiaries, operates as a multiline insurance company in the United States. The Company operates Property and Casualty Insurance, Annuity Products, and Life Insurance segments. It underwrites and markets personal lines of property and casualty insurance, including personal lines automobile and property insurance products; retirement products, such as tax-qualified annuities; and life insurance products. The company markets its products through its sales force of full-time exclusive distributors and independent agents to K-12 teachers, administrators, and other employees of public schools and their families. Horace Mann Educators Corporation was founded in 1945 and is headquartered in Springfield, Illinois.

Cincinnati Financial Company Profile

Cincinnati Financial Corporation provides property casualty insurance products in the United States. The company operates in five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments. The Commercial Lines Insurance segment provides coverage for commercial casualty, commercial property, commercial auto, and workers' compensation. It also offers director and officer liability insurance, contract and commercial surety bonds, and fidelity bonds; coverage for property, liability, and business interruption; and machinery and equipment coverage. The Personal Lines Insurance segment provides personal auto insurance; homeowners 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; and commercial property insurance, which insures buildings, inventory, equipment, and business income from loss or damage due to 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, whole life, and disability insurance offered to employees through their employer; and whole life insurance products, as well as markets disability income insurance, deferred annuities, and immediate annuities. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, and redeemable preferred stocks; and equity investments comprising common and nonredeemable preferred stocks. The company also offers commercial leasing and financing services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.

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