Travelers' Shares Hit 52-Week High - Analyst Blog
March 22 2013 - 6:20AM
Zacks
On Mar 20, 2013, the shares of The Travelers Companies,
Inc. (TRV) hit a 52-week high of $84.10. Previously, the
company generated a 500% earnings surprise in the fourth quarter of
2012. The company generated positive earning surprise in 6 out of
the past 10 quarters.
Travelers reported operating earnings of 72 cents per share in
the fourth quarter of 2012, which surpassed the Zacks Consensus
Estimate of 4 cents. Net written premiums during the quarter were
$5.4 billion, up 2% year over year.
Total revenue also increased 2% year over year to $6.5 billion,
driven by the augmentation in premiums earned and net investment
income. Revenues surpassed the Zacks Consensus Estimate of $6.3
billion.
Moreover, over the last 8 years, Travelers continuously
registered better returns on equity (ROE) than its peers. Further,
the company’s dividend yield averaged 2.58% over the last five
years, much ahead of the industry yield of 0.96%.
Travelers also has a strong balance sheet with ample statutory
surplus levels. Moreover, the company is the second-largest writer
of auto and homeowners’ insurance through independent agents and
the sixth-largest writer of commercial U.S. property-casualty
insurance.
The valuation of Travelers looks attractive. The shares are
trading at a discount to peers both on price-to-book and forward
price-to-earnings basis, while the return on equity of 9.6% is
higher than the peer group average of 9.3%.
Travelers carries a Zacks Rank #2 (Buy). Other property &
casualty insurance companies worth considering are Arch
Capital Group Ltd. (ACGL), Aspen Insurance
Holdings Ltd. (AHL) and Cincinnati Financial
Corp. (CINF). All these companies carry a Zacks Rank #1
(Strong Buy).
ARCH CAP GP LTD (ACGL): Free Stock Analysis Report
ASPEN INS HLDGS (AHL): Free Stock Analysis Report
CINCINNATI FINL (CINF): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
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