Intrinsic value of CNA Financial - CNA

Previous Close

$51.68

  Intrinsic Value

$77.54

stock screener

  Rating & Target

str. buy

+50%

  Value-price divergence*

-57%

Previous close

$51.68

 
Intrinsic value

$77.54

 
Up/down potential

+50%

 
Rating

str. buy

 
Value-price divergence*

-57%

Our model is not good at valuating stocks of financial companies, such as CNA.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CNA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 14.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.05
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
  5.03
  5.02
  5.02
  5.02
  5.02
  5.02
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.01
  5.00
Revenue, $m
  0
  9,929
  10,434
  10,964
  11,521
  12,104
  12,716
  13,359
  14,033
  14,741
  15,484
  16,263
  17,082
  17,941
  18,842
  19,789
  20,782
  21,825
  22,920
  24,069
  25,276
  26,543
  27,873
  29,270
  30,736
  32,275
  33,891
  35,588
  37,369
  39,240
  41,203
Variable operating expenses, $m
 
  9,173
  9,640
  10,129
  10,642
  11,180
  11,745
  12,338
  12,960
  13,613
  14,298
  15,002
  15,757
  16,550
  17,381
  18,254
  19,171
  20,133
  21,143
  22,203
  23,316
  24,485
  25,712
  27,000
  28,353
  29,772
  31,263
  32,828
  34,472
  36,197
  38,009
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  8,151
  9,173
  9,640
  10,129
  10,642
  11,180
  11,745
  12,338
  12,960
  13,613
  14,298
  15,002
  15,757
  16,550
  17,381
  18,254
  19,171
  20,133
  21,143
  22,203
  23,316
  24,485
  25,712
  27,000
  28,353
  29,772
  31,263
  32,828
  34,472
  36,197
  38,009
Operating income, $m
  1,296
  755
  795
  836
  879
  924
  971
  1,021
  1,074
  1,128
  1,186
  1,261
  1,324
  1,391
  1,461
  1,534
  1,611
  1,692
  1,777
  1,866
  1,960
  2,058
  2,161
  2,269
  2,383
  2,502
  2,628
  2,759
  2,897
  3,042
  3,195
EBITDA, $m
  1,373
  808
  849
  892
  937
  984
  1,034
  1,087
  1,141
  1,199
  1,259
  1,323
  1,389
  1,459
  1,533
  1,610
  1,690
  1,775
  1,864
  1,958
  2,056
  2,159
  2,267
  2,381
  2,500
  2,625
  2,757
  2,895
  3,039
  3,192
  3,351
Interest expense (income), $m
  157
  163
  295
  433
  579
  732
  892
  1,060
  1,237
  1,422
  1,617
  1,821
  2,035
  2,260
  2,496
  2,743
  3,003
  3,276
  3,563
  3,864
  4,180
  4,511
  4,859
  5,225
  5,608
  6,011
  6,434
  6,878
  7,344
  7,833
  8,347
Earnings before tax, $m
  1,137
  593
  500
  402
  300
  192
  79
  -39
  -163
  -294
  -431
  -560
  -711
  -869
  -1,035
  -1,209
  -1,392
  -1,584
  -1,786
  -1,998
  -2,220
  -2,453
  -2,698
  -2,955
  -3,225
  -3,509
  -3,806
  -4,119
  -4,447
  -4,791
  -5,153
Tax expense, $m
  278
  160
  135
  109
  81
  52
  21
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  859
  433
  365
  294
  219
  140
  58
  -39
  -163
  -294
  -431
  -560
  -711
  -869
  -1,035
  -1,209
  -1,392
  -1,584
  -1,786
  -1,998
  -2,220
  -2,453
  -2,698
  -2,955
  -3,225
  -3,509
  -3,806
  -4,119
  -4,447
  -4,791
  -5,153

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  55,233
  58,063
  61,019
  64,119
  67,372
  70,784
  74,365
  78,123
  82,067
  86,205
  90,549
  95,108
  99,893
  104,916
  110,189
  115,723
  121,533
  127,632
  134,035
  140,757
  147,814
  155,223
  163,001
  171,167
  179,741
  188,742
  198,193
  208,115
  218,533
  229,471
  240,955
Adjusted assets (=assets-cash), $m
  55,233
  58,063
  61,019
  64,119
  67,372
  70,784
  74,365
  78,123
  82,067
  86,205
  90,549
  95,108
  99,893
  104,916
  110,189
  115,723
  121,533
  127,632
  134,035
  140,757
  147,814
  155,223
  163,001
  171,167
  179,741
  188,742
  198,193
  208,115
  218,533
  229,471
  240,955
Revenue / Adjusted assets
  0.000
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
  0.171
Average production assets, $m
  361
  377
  396
  417
  438
  460
  483
  508
  533
  560
  588
  618
  649
  682
  716
  752
  790
  829
  871
  915
  960
  1,009
  1,059
  1,112
  1,168
  1,226
  1,288
  1,352
  1,420
  1,491
  1,566
Working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total debt, $m
  2,710
  4,909
  7,224
  9,651
  12,198
  14,870
  17,674
  20,616
  23,704
  26,945
  30,346
  33,916
  37,662
  41,595
  45,724
  50,057
  54,607
  59,382
  64,396
  69,659
  75,184
  80,985
  87,076
  93,470
  100,183
  107,231
  114,631
  122,400
  130,557
  139,122
  148,114
Total liabilities, $m
  43,264
  45,463
  47,778
  50,205
  52,752
  55,424
  58,228
  61,170
  64,258
  67,499
  70,900
  74,470
  78,216
  82,149
  86,278
  90,611
  95,161
  99,936
  104,950
  110,213
  115,738
  121,539
  127,630
  134,024
  140,737
  147,785
  155,185
  162,954
  171,111
  179,676
  188,668
Total equity, $m
  11,969
  12,600
  13,241
  13,914
  14,620
  15,360
  16,137
  16,953
  17,808
  18,707
  19,649
  20,638
  21,677
  22,767
  23,911
  25,112
  26,373
  27,696
  29,086
  30,544
  32,076
  33,683
  35,371
  37,143
  39,004
  40,957
  43,008
  45,161
  47,422
  49,795
  52,287
Total liabilities and equity, $m
  55,233
  58,063
  61,019
  64,119
  67,372
  70,784
  74,365
  78,123
  82,066
  86,206
  90,549
  95,108
  99,893
  104,916
  110,189
  115,723
  121,534
  127,632
  134,036
  140,757
  147,814
  155,222
  163,001
  171,167
  179,741
  188,742
  198,193
  208,115
  218,533
  229,471
  240,955
Debt-to-equity ratio
  0.226
  0.390
  0.550
  0.690
  0.830
  0.970
  1.100
  1.220
  1.330
  1.440
  1.540
  1.640
  1.740
  1.830
  1.910
  1.990
  2.070
  2.140
  2.210
  2.280
  2.340
  2.400
  2.460
  2.520
  2.570
  2.620
  2.670
  2.710
  2.750
  2.790
  2.830
Adjusted equity ratio
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217
  0.217

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  859
  433
  365
  294
  219
  140
  58
  -39
  -163
  -294
  -431
  -560
  -711
  -869
  -1,035
  -1,209
  -1,392
  -1,584
  -1,786
  -1,998
  -2,220
  -2,453
  -2,698
  -2,955
  -3,225
  -3,509
  -3,806
  -4,119
  -4,447
  -4,791
  -5,153
Depreciation, amort., depletion, $m
  77
  52
  54
  56
  58
  60
  63
  65
  68
  71
  73
  62
  65
  68
  72
  75
  79
  83
  87
  91
  96
  101
  106
  111
  117
  123
  129
  135
  142
  149
  157
Funds from operations, $m
  1,558
  485
  419
  350
  277
  201
  121
  26
  -96
  -223
  -357
  -498
  -646
  -801
  -963
  -1,134
  -1,313
  -1,501
  -1,699
  -1,906
  -2,124
  -2,352
  -2,592
  -2,844
  -3,108
  -3,386
  -3,677
  -3,983
  -4,305
  -4,642
  -4,996
Change in working capital, $m
  142
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from operations, $m
  1,416
  485
  419
  350
  277
  201
  121
  26
  -96
  -223
  -357
  -498
  -646
  -801
  -963
  -1,134
  -1,313
  -1,501
  -1,699
  -1,906
  -2,124
  -2,352
  -2,592
  -2,844
  -3,108
  -3,386
  -3,677
  -3,983
  -4,305
  -4,642
  -4,996
Maintenance CAPEX, $m
  0
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
  -123
  -129
  -135
  -142
  -149
New CAPEX, $m
  -146
  -16
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -64
  -68
  -71
  -75
Cash from investing activities, $m
  -846
  -52
  -57
  -60
  -63
  -66
  -69
  -72
  -77
  -80
  -84
  -89
  -93
  -98
  -102
  -108
  -113
  -119
  -125
  -131
  -137
  -144
  -152
  -159
  -167
  -175
  -184
  -193
  -203
  -213
  -224
Free cash flow, $m
  570
  433
  362
  290
  214
  135
  51
  -47
  -172
  -304
  -442
  -586
  -738
  -898
  -1,066
  -1,241
  -1,426
  -1,620
  -1,823
  -2,037
  -2,261
  -2,496
  -2,743
  -3,003
  -3,275
  -3,561
  -3,861
  -4,177
  -4,508
  -4,855
  -5,220
Issuance/(repayment) of debt, $m
  140
  2,199
  2,314
  2,428
  2,547
  2,672
  2,804
  2,942
  3,088
  3,241
  3,401
  3,570
  3,747
  3,933
  4,128
  4,334
  4,549
  4,776
  5,013
  5,263
  5,526
  5,801
  6,090
  6,394
  6,713
  7,048
  7,400
  7,769
  8,157
  8,565
  8,992
Issuance/(repurchase) of shares, $m
  0
  198
  276
  379
  487
  600
  719
  855
  1,019
  1,192
  1,373
  1,549
  1,749
  1,959
  2,179
  2,410
  2,653
  2,908
  3,175
  3,456
  3,751
  4,061
  4,386
  4,727
  5,086
  5,462
  5,857
  6,272
  6,707
  7,165
  7,645
Cash from financing (excl. dividends), $m  
  140
  2,397
  2,590
  2,807
  3,034
  3,272
  3,523
  3,797
  4,107
  4,433
  4,774
  5,119
  5,496
  5,892
  6,307
  6,744
  7,202
  7,684
  8,188
  8,719
  9,277
  9,862
  10,476
  11,121
  11,799
  12,510
  13,257
  14,041
  14,864
  15,730
  16,637
Total cash flow (excl. dividends), $m
  697
  2,830
  2,953
  3,097
  3,248
  3,407
  3,575
  3,750
  3,935
  4,129
  4,333
  4,532
  4,757
  4,994
  5,242
  5,502
  5,776
  6,064
  6,365
  6,683
  7,016
  7,365
  7,733
  8,118
  8,523
  8,949
  9,395
  9,864
  10,357
  10,874
  11,417
Retained Cash Flow (-), $m
  -213
  -631
  -641
  -673
  -706
  -741
  -777
  -855
  -1,019
  -1,192
  -1,373
  -1,549
  -1,749
  -1,959
  -2,179
  -2,410
  -2,653
  -2,908
  -3,175
  -3,456
  -3,751
  -4,061
  -4,386
  -4,727
  -5,086
  -5,462
  -5,857
  -6,272
  -6,707
  -7,165
  -7,645
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,199
  2,311
  2,424
  2,542
  2,667
  2,797
  2,896
  2,916
  2,937
  2,960
  2,983
  3,008
  3,035
  3,063
  3,092
  3,123
  3,156
  3,190
  3,226
  3,265
  3,305
  3,347
  3,391
  3,438
  3,487
  3,538
  3,593
  3,650
  3,710
  3,772
Discount rate, %
 
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
 
  2,103
  2,103
  2,090
  2,066
  2,032
  1,987
  1,905
  1,765
  1,625
  1,485
  1,347
  1,212
  1,081
  956
  836
  724
  620
  525
  439
  362
  294
  236
  186
  144
  110
  82
  60
  43
  30
  21
Current shareholders' claim on cash, %
  100
  98.6
  96.8
  94.5
  91.7
  88.6
  85.2
  81.5
  77.5
  73.3
  69.0
  64.6
  60.2
  55.9
  51.7
  47.6
  43.6
  39.9
  36.3
  32.9
  29.8
  26.9
  24.2
  21.7
  19.4
  17.3
  15.5
  13.7
  12.2
  10.8
  9.5

CNA Financial Corporation provides commercial property and casualty insurance products primarily in the United States. It operates through Specialty, Commercial, International, Life & Group Non-Core, and Corporate & Other Non-Core segments. The company’s property insurance products include property, marine, boiler, and machinery coverages; and casualty insurance products comprise workers compensation, general and product liability, commercial auto, and umbrella coverages. It also offers management and professional liability insurance and risk management services, and other specialized property and casualty coverages to various professional firms, including architects, real estate agents, and accounting and law firms; surety and fidelity bonds, and warranty and alternative risks products; directors and officers, employment practices, fiduciary and fidelity coverages to small and mid-size firms, public and private firms, and not-for-profit organizations; and professional and general liability, as well as associated standard property and casualty coverages for healthcare industry. In addition, the company underwrites long-tail exposures, including commercial automobile liability, workers' compensation, general and medical professional liability, other professional and management liability, and assumed reinsurance run-off and products liability; short-tail exposures include property, commercial automobile physical damage, marine, surety, and warranty. CNA Financial Corporation markets its products through independent agents, brokers, and general underwriters to customers, including small, medium, and large businesses; insurance companies; associations; professionals; and other groups. It serves marine, property, financial services, healthcare, technology, oil and gas, construction, manufacturing, and life science industries. The company was founded in 1853 and is based in Chicago, Illinois. CNA Financial Corporation operates as a subsidiary of Loews Corporation.

FINANCIAL RATIOS  of  CNA Financial (CNA)

Valuation Ratios
P/E Ratio 16.3
Price to Sales 1.5
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 9.9
Price to Free Cash Flow 11
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.8%
Cap. Spend. - 3 Yr. Gr. Rate 9.9%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 22.6%
Total Debt to Equity 22.6%
Interest Coverage 8
Management Effectiveness
Return On Assets 1.8%
Ret/ On Assets - 3 Yr. Avg. 1.4%
Return On Total Capital 5.9%
Ret/ On T. Cap. - 3 Yr. Avg. 4.6%
Return On Equity 7.2%
Return On Equity - 3 Yr. Avg. 5.5%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 14.5%
EBITDA Margin - 3 Yr. Avg. 12.7%
Operating Margin 13.7%
Oper. Margin - 3 Yr. Avg. 11.9%
Pre-Tax Margin 12%
Pre-Tax Margin - 3 Yr. Avg. 10.1%
Net Profit Margin 9.1%
Net Profit Margin - 3 Yr. Avg. 7.1%
Effective Tax Rate 24.5%
Eff/ Tax Rate - 3 Yr. Avg. 21.2%
Payout Ratio 94.6%

CNA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CNA stock intrinsic value calculation we used $9447 million for the last fiscal year's total revenue generated by CNA Financial. The default revenue input number comes from 2016 income statement of CNA Financial. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CNA stock valuation model: a) initial revenue growth rate of 5.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.6%, whose default value for CNA is calculated based on our internal credit rating of CNA Financial, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CNA Financial.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CNA stock the variable cost ratio is equal to 92.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CNA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6% for CNA Financial.

Corporate tax rate of 27% is the nominal tax rate for CNA Financial. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CNA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CNA are equal to 3.8%.

Life of production assets of 10 years is the average useful life of capital assets used in CNA Financial operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CNA is equal to 0%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11969 million for CNA Financial - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 270.406 million for CNA Financial is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CNA Financial at the current share price and the inputted number of shares is $14.0 billion.

RELATED COMPANIES Price Int.Val. Rating
AFG American Finan 101.66 364.92  str.buy
RLI RLI 54.09 56.72  hold
L Loews 47.58 40.86  hold
ACGL Arch Capital G 96.17 448.58  str.buy
WTM White Mountain 864.63 304.89  str.sell
HIG Hartford Finan 55.56 174.35  str.buy
HALL Hallmark Finan 11.03 40.76  str.buy
MCY Mercury Genera 58.00 27.48  sell

COMPANY NEWS

▶ CNA Canada Launches New Website   [Aug-01-17 02:58PM  PR Newswire]
▶ CNA Financial beats 2Q profit forecasts   [Jul-31-17 09:34PM  Associated Press]
▶ CNA Names Uptime Institute as New Allied Vendor   [Jul-11-17 09:05AM  PR Newswire]
▶ CNA Creates New Affinity Programs Unit   [09:22AM  PR Newswire]
▶ CNA's Sarah Pang Receives IICF Inclusion Champion Award   [Jun-09-17 10:15AM  PR Newswire]
▶ CNA Announces Scott Weber as New General Counsel   [Jun-02-17 06:00AM  PR Newswire]
▶ CNA Canada's Vancouver Branch Relocates   [May-31-17 02:00PM  PR Newswire]
▶ Company News for May 02, 2017   [May-02-17 10:33AM  Zacks]
▶ CNA Financial beats 1Q profit forecasts   [06:16AM  Associated Press]
▶ CNA Announces New Member to Board of Directors   [Apr-27-17 04:50PM  PR Newswire]
▶ Plymouth Tube Receives The 2017 Rusty Demeules Award   [Apr-26-17 10:00AM  PR Newswire]
▶ How Law Firms Can Implement a Cyber Security Program   [Apr-19-17 08:00AM  PR Newswire]
▶ CNA Announces New Aging Services Policy Forms   [Apr-17-17 09:00AM  PR Newswire]
▶ Loews to Buy Consolidated Container for $1.2 Bln   [Apr-11-17 01:32PM  Investopedia]
▶ There's No LOL In Distracted Driving   [Mar-30-17 03:30PM  PR Newswire]
▶ CNA Announces Aclaimant As New Allied Vendor   [Mar-16-17 09:00AM  PR Newswire]
▶ The Future of Construction, Brought to You by Drones   [Mar-13-17 09:00AM  PR Newswire]
▶ CNA Named Premier Sponsor of Worldwide Broker Network   [Mar-09-17 08:00AM  PR Newswire]
▶ CNA Announces Joyce Trimuel As Chief Diversity Officer   [Mar-06-17 09:00AM  PR Newswire]
Stock chart of CNA Financial statements of CNA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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