Cincinnati Financial

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Another large player in the property and casualty insurance space is Cincinnati Financial ( CINF). Headquartered in Ohio, the company sells insurance through independent agents in many of the areas that have been hit hard by tornados. Unlike Allstate, shares of Cincinnati Financial have trended closer to the market performance in May.

Shares fell 4% during the month, continuing a slide that actually began in late February. Cincinnati Financial hit its 52-week high of $34.33 on Feb. 15. Accelerating that slide was an earning report for the first quarter that missed analyst expectations by 3 cents per share.

That slight earnings miss may be troubling, but not in the context of cash flow. Cincinnati Financial, one of the highest-yielding insurance stocks, pays a dividend that is above 5%, and analysts have the company making 79 cents per share this year and $1.52 per share in the following year. Investors can buy that impressive growth for 19 times the 2012 estimate.

While there may be risk of higher claims and further selling in the stock, those risks are mitigated by the low valuation relative to growth and an impressive dividend. I would buy Cincinnati Financial at these prices.

Buying Cincinnati Financial in the first quarter was Jean-Marie Eveillard's Eagle Investment Management, which increased its position in the stock by 1.4% to 10.9 million shares.

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