* Note: Prices are in Million (M) USD.
Description:
CNA Financial Corporation offers commercial property and casualty insurance products primarily in the United States.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $483 M
Debt : $2,974 M
EBITDA : $1,411 M
Net Debt (Debt - Cash): $2,491 M
Since Net Debt is covered by EBITDA within 2 years, 2 points assigned.
This criteria used industry in which company operates:
Sector: Financial services
Industry: Insurance - property & casualty
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 10.54
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $1,560 M
Average Revenue: $10,275 M
Revenue Converted To Free Cash Flow (%): 15.2%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 15, 3 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $13,999 M
Revenue 4 Years Ago (2020-12-31): $11,908 M
Last 5 Years Average Revenue Growth: 4%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $273 M
Share Count 5 Years Ago (2020-12-31): $273 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $4.80
Trailing 12-Month Earnings Per Share (EPS): $4.60
Average Earnings Per Share (EPS): $4.70
Dividend Per Share (DPS): $2
Payout Ratio: 38%
Dividend Yield: 4%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 4, 4 points assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 28.9%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $50
52-Week Low: $43
Threshold Price (15% Above 52-Week Low): $50
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $11,878 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 35 points to above CNA Financial Corporation (CNA) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
33.10 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (13.55)
× EPS ($4.70) = $63.69.
Last 20 Years Avg PE 13.55, Fair Value PE 15, Industry Based PE 15, Growth Based PE 3, RCFC Based PE 22.14, ROE Based PE 33.1, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 16.98. Value-Trades has assined P/E value 16.98. Since an average (Current Year EPS + Next Year EPS) earning per share is $4.7.
The fair value of CNA Financial Corporation (CNA) stock should be (16.98 x $4.7) = $79.82.
