Hanover Insurance Group (NYSE: THG) and Travelers Companies (NYSE:TRV) are both financials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, earnings, profitability, valuation, risk, institutional ownership and dividends.
Volatility & Risk
Hanover Insurance Group has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Travelers Companies has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.
This table compares Hanover Insurance Group and Travelers Companies’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hanover Insurance Group||$5.18 billion||0.97||$186.20 million||$5.24||22.47|
|Travelers Companies||$28.90 billion||1.33||$2.06 billion||$7.31||19.36|
Travelers Companies has higher revenue and earnings than Hanover Insurance Group. Travelers Companies is trading at a lower price-to-earnings ratio than Hanover Insurance Group, indicating that it is currently the more affordable of the two stocks.
This table compares Hanover Insurance Group and Travelers Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hanover Insurance Group||3.59%||6.88%||1.36%|
Insider and Institutional Ownership
86.0% of Hanover Insurance Group shares are held by institutional investors. Comparatively, 80.2% of Travelers Companies shares are held by institutional investors. 1.1% of Hanover Insurance Group shares are held by company insiders. Comparatively, 0.8% of Travelers Companies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Hanover Insurance Group pays an annual dividend of $2.16 per share and has a dividend yield of 1.8%. Travelers Companies pays an annual dividend of $2.88 per share and has a dividend yield of 2.0%. Hanover Insurance Group pays out 41.2% of its earnings in the form of a dividend. Travelers Companies pays out 39.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hanover Insurance Group has raised its dividend for 6 consecutive years and Travelers Companies has raised its dividend for 9 consecutive years. Travelers Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current ratings and target prices for Hanover Insurance Group and Travelers Companies, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hanover Insurance Group||0||1||0||0||2.00|
Hanover Insurance Group presently has a consensus price target of $91.00, indicating a potential downside of 22.70%. Travelers Companies has a consensus price target of $136.57, indicating a potential downside of 3.48%. Given Travelers Companies’ stronger consensus rating and higher probable upside, analysts clearly believe Travelers Companies is more favorable than Hanover Insurance Group.
Travelers Companies beats Hanover Insurance Group on 14 of the 17 factors compared between the two stocks.
Hanover Insurance Group Company Profile
The Hanover Insurance Group, Inc. is a holding company. The Company is engaged in providing property and casualty insurance products and services. The Company has four segments: Commercial Lines, Personal Lines, Chaucer and Other. It markets its domestic products and services through independent agents and brokers in the United States, and conducts business internationally through a subsidiary, Chaucer Holdings Limited, which operates through the Society and Corporation of Lloyd’s (Lloyd’s). Its Commercial Lines product suite provides agents and customers with products designed for small, middle and specialized markets. Its Personal Lines coverages include other personal lines, which consist of umbrella and fire, among others. The Chaucer segment consists of international business written through Lloyd’s, including marine and aviation, and property. The Other segment consists of Opus Investment Management, Inc. (Opus), which provides investment advisory services to affiliates.
Travelers Companies Company Profile
The Travelers Companies, Inc. is a holding company. The Company’s segments include Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Through its subsidiaries, it provides commercial and personal property and casualty insurance products and services. The Business and International Insurance segment offers property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil and throughout other parts of the world. The Bond & Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The Personal Insurance segment writes a range of property and casualty insurance covering individuals’ personal risks.
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