Cincinnati Financial (CINF) Stock Could Be 27% Overvalued On Modest Excess Returns

Cincinnati Financial has delivered a powerful share price run over the past few years, which naturally puts today’s valuation under the microscope. With the stock now trading at US$176.30, investors are asking whether that price is supported by the returns the insurer earns on its capital. Over the past 3 years the share price has climbed 94.3%, which puts more pressure on the question of whether the underlying returns on capital are strong enough to support that kind of step up. As an...