CNA Financial (CNA), a large Chicago-based commercial property and casualty insurer, hit its 12th new 52-week low of the past 12 months on Tuesday. That's not great news for Loews Corporation, the New York holding company that owns 92% of CNA's stock.

I've admired Loews for a long time. Run by the Tisch family for years — the current CEO is Ben Tisch, who succeeded his father, Jim, at the beginning of 2025 — it has had a history of great success in the markets, as well as some less successful periods.

I’m fascinated by holding companies such as Loews and Berkshire Hathaway (BRK.B). I enjoy the complexity and the difficulty in valuing these businesses. 

As a result of hitting its 12th 52-week low, CNA stock has declined nearly 10% over the past year, while Loews stock has increased by over 14%. 

Despite Loews' relative outperformance, this could be the kiss of death for the holding company. 

Here are my two cents on both sides of the argument.

A Quick History Lesson

Brothers Bob and Larry Tisch's first significant move was to build the Americana Hotel in Bal Harbour, Florida, in 1956. The Loews name came in 1960 when it acquired Loew’s Theaters for an estimated $17 million.

After acquiring tobacco maker Lorillard in 1968, the Tischs created Loews Corporation a year later, dropping the apostrophe from its name. They acquired 83% of CNA Financial in 1974 for approximately $206 million. Today, its 92% stake is worth $10.8 billion, a compound annual growth rate (CAGR) of 8.1%. 

Keep in mind that this doesn’t include the dividends received over the years from Loews’ stake in CNA. Nor does it consider the investment portfolio the holding company amassed, similar to Berkshire Hathaway.   

Fast forward to today. 

CNA is part of a holding company that owns three other private subsidiaries: Boardwalk Pipelines, Loews Hotels, and Altium Packaging. In addition, the holding company has $3.5 billion in cash and investments at the corporate level. 

It’s the ultimate sum-of-the-parts is greater than the whole business. 

The Pros of Owning CNA Stock Despite the Poor Performance

As I mentioned earlier, the ownership of CNA isn’t just about capital appreciation, but also about the dividends received, and to a much lesser extent, the share repurchases made by CNA--$20 million in 2024 and $24 million in 2023--which increase its ownership stake without requiring any additional investment.

As of March 7, 2025, Loews owned 248.41 million shares of CNA stock. CNA paid out $1.76 in quarterly dividends and a $2.00 special dividend. This year, it will pay out $1.84 in quarterly dividends, and it already paid a $2.00 special dividend in March.

Loews has collected $1.89 billion in dividends from CNA over the past two years. In 2024, in addition to the $934 million in dividends from CNA, it received $400 million from Boardwalk Pipelines.

Over the past five years, CNA has made $7.95 in special dividends, nearly a $2 billion additional payout to Loews. Like Buffett, Loews prefers to receive dividends rather than pay them out. Loews had paid a quarterly dividend of $0.0625 since June 2006. The $0.25 annual rate yields just 0.3%.

Ultimately, CNA has paid out $16.35 in dividends over the past five years. Based on its current share price of $43.33, its effective yield is 37.7%, not the 4.25% stated.       

That’s why Loews isn’t disappointed with CNA stock’s performance over the near-term and long-term.

The Cons of Owning CNA Stock Over the Years

Los Angeles money manager Capital Group has an excellent piece on its American Funds website about market timing. The example it gives to explain why time in the market is far more beneficial than market timing involves two investors, each investing $10,000 annually in the S&P 500 over 20 years through Dec. 31, 2024. 

One investor invests $10,000 annually at the year’s low for the index. The other invests a similar amount at the year’s high. The difference in the annual return over 20 years between the two strategies was just 171 basis points — 12.25% for the market lows and 10.54% for the market highs. 

I mention this because the Tischs could have invested the $206 million they used to acquire 83% of CNA Financial in the stocks of the S&P 500, which was created in March 1957.

However, adjusted for inflation, the CAGR for the index from Jan. 1, 1975, through July 15 was 5.2%, 290 basis points less than CNA’s CAGR over the same period. Furthermore, the dividends Loews would have missed by investing in an S&P 500-like vehicle would have compounded the underperformance. 

The one argument you could make, and this is entirely in hindsight, is that it could have invested in Walmart (WMT) stock, which has generated a cumulative return over the past 5o years (July 1975 to July 2025) of 1,071,697.75% according to Statmuse. 

Based on this return, a $206 million investment in Walmart in July 1975 would be worth approximately $2.2 trillion today. 

Of course, Walmart’s market cap is just $763 billion, so Loews wouldn’t have been able to invest anywhere near $206 million in the rapidly expanding discount retailer that owned 125 stores at the end of 1974, up from 78 a year before. 

The Bottom Line

While a newcomer to CNA stock would see its performance--up 30% over the past five years, one-third the return of the S&P 500--and wonder why Loews keeps holding.

The Tischs have billions of reasons for holding firm. Loews remains an excellent long-term buy for patient investors. This latest bout of underperformance will pass. CNA is most certainly not the kiss of death for Loews.

On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.