Cincinnati Financial is scored 94 for moat and 90 for management. The management score rests on a return on invested capital of 10.7% and a gross margin of 47.4% — figures that describe a business turning capital into profit efficiently. Debt sits at 0.06x equity.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 10.9% a year, below the 11.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 10.8x. That produces an intrinsic value of $158.57, a 10-CAP price of $219.05 and a payback time price of $286.80, with the value zone set at the highest of the three, $286.80. Today's price of $162.15 sits inside that zone.
A business scoring this well, trading inside its value zone, is the combination the framework exists to find — which is also the reason to check why the market disagrees. A margin of safety score of 49 describes the cushion, not the certainty.
| Price | $162.15 |
| Market cap | $24.9B |
| P/E ratio | 7.6x |
| Return on invested capital | 10.7% |
| Gross margin | 47.4% |
| Debt to equity | 0.06x |
| Free cash flow yield | 12.0% |
| Growth rate used | 10.9% |
| Growth rate measured | 11.0% |
| Exit multiple assumed | 10.8x |
| Company | Moat | Buy price |
| W. R. Berkley Corporation (WRB) | 84 | $128.14 |
| Loews Corporation (L) | 70 | $113.81 |
| Markel Group Inc (MKL) | 77 | $2,610.51 |
| Fairfax Financial Hldgs Ltd (FRFHF) | 75 | $536.21 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Cincinnati Financial rather than accepting ours.