HANOVER INSURANCE GROUP INC/ (THG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:THG - US4108671052 - Common Stock
169.96 USD
-0.19 (-0.11%)
169.96 USD
0 (0%)
THG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 149 industry peers in the Insurance industry. While THG is still in line with the averages on profitability rating, there are concerns on its financial health. THG scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
- In the past year THG was profitable.
- THG had a positive operating cash flow in the past year.
- THG had positive earnings in each of the past 5 years.
- THG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- THG has a Return On Assets of 3.77%. This is in the better half of the industry: THG outperforms 73.83% of its industry peers.
- Looking at the Return On Equity, with a value of 18.44%, THG belongs to the top of the industry, outperforming 81.21% of the companies in the same industry.
- THG has a better Return On Invested Capital (4.13%) than 68.46% of its industry peers.
- THG had an Average Return On Invested Capital over the past 3 years of 1.75%. This is significantly below the industry average of 14.92%.
- The last Return On Invested Capital (4.13%) for THG is above the 3 year average (1.75%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.77% | ||
| ROE | 18.44% | ||
| ROIC | 4.13% |
ROA(3y)1.29%
ROA(5y)1.89%
ROE(3y)7.13%
ROE(5y)9.18%
ROIC(3y)1.75%
ROIC(5y)2.21%
1.3 Margins
- The Profit Margin of THG (9.72%) is better than 60.40% of its industry peers.
- THG's Profit Margin has declined in the last couple of years.
- THG has a Operating Margin (12.71%) which is in line with its industry peers.
- In the last couple of years the Operating Margin of THG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.71% | ||
| PM (TTM) | 9.72% | ||
| GM | N/A |
OM growth 3Y1.9%
OM growth 5Y-0.99%
PM growth 3Y-5.85%
PM growth 5Y-5.09%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so THG is destroying value.
- THG has more shares outstanding than it did 1 year ago.
- Compared to 5 years ago, THG has less shares outstanding
- THG has a better debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of THG is 1.28, which is an excellent value as it means it would take THG, only 1.28 years of fcf income to pay off all of its debts.
- With a decent Debt to FCF ratio value of 1.28, THG is doing good in the industry, outperforming 64.43% of the companies in the same industry.
- A Debt/Equity ratio of 0.37 indicates that THG is not too dependend on debt financing.
- The Debt to Equity ratio of THG (0.37) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 1.28 | ||
| Altman-Z | N/A |
ROIC/WACC0.5
WACC8.25%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 67.24% over the past year.
- The Earnings Per Share has been growing by 10.31% on average over the past years. This is quite good.
- Looking at the last year, THG shows a small growth in Revenue. The Revenue has grown by 5.45% in the last year.
- THG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.41% yearly.
EPS 1Y (TTM)67.24%
EPS 3Y15.11%
EPS 5Y10.31%
EPS Q2Q%66.89%
Revenue 1Y (TTM)5.45%
Revenue growth 3Y6.83%
Revenue growth 5Y5.41%
Sales Q2Q%-0.58%
3.2 Future
- Based on estimates for the next years, THG will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.33% on average per year.
- The Revenue is expected to grow by 5.20% on average over the next years.
EPS Next Y36.2%
EPS Next 2Y13.05%
EPS Next 3Y10.33%
EPS Next 5YN/A
Revenue Next Year5.18%
Revenue Next 2Y5.18%
Revenue Next 3Y5.2%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- THG is valuated reasonably with a Price/Earnings ratio of 9.12.
- 67.79% of the companies in the same industry are more expensive than THG, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of THG to the average of the S&P500 Index (27.38), we can say THG is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 9.98, the valuation of THG can be described as reasonable.
- The rest of the industry has a similar Price/Forward Earnings ratio as THG.
- THG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.12 | ||
| Fwd PE | 9.98 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, THG is valued a bit cheaper than the industry average as 65.10% of the companies are valued more expensively.
- 64.43% of the companies in the same industry are more expensive than THG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.04 | ||
| EV/EBITDA | 7.22 |
4.3 Compensation for Growth
- THG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- THG has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)0.25
PEG (5Y)0.88
EPS Next 2Y13.05%
EPS Next 3Y10.33%
5. Dividend
5.1 Amount
- THG has a Yearly Dividend Yield of 2.23%. Purely for dividend investing, there may be better candidates out there.
- THG's Dividend Yield is comparable with the industry average which is at 2.53.
- THG's Dividend Yield is a higher than the S&P500 average which is at 1.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
5.2 History
- The dividend of THG decreases each year by -18.55%.
- THG has been paying a dividend for at least 10 years, so it has a reliable track record.
- THG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-18.55%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
- THG pays out 20.46% of its income as dividend. This is a sustainable payout ratio.
DP20.46%
EPS Next 2Y13.05%
EPS Next 3Y10.33%
169.96
-0.19 (-0.11%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)10-29 2025-10-29/amc
Earnings (Next)02-03 2026-02-03/amc
Inst Owners90.46%
Inst Owner Change-0.29%
Ins Owners0.85%
Ins Owner Change-0.24%
Market Cap6.05B
Revenue(TTM)6.50B
Net Income(TTM)631.90M
Analysts76.67
Price Target204.13 (20.1%)
Short Float %1.82%
Short Ratio2.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
Yearly Dividend3.46
Dividend Growth(5Y)-18.55%
DP20.46%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)28.67%
Min EPS beat(2)19.49%
Max EPS beat(2)37.85%
EPS beat(4)4
Avg EPS beat(4)31.23%
Min EPS beat(4)11.06%
Max EPS beat(4)56.53%
EPS beat(8)8
Avg EPS beat(8)21.37%
EPS beat(12)9
Avg EPS beat(12)-0.32%
EPS beat(16)13
Avg EPS beat(16)2.79%
Revenue beat(2)0
Avg Revenue beat(2)-4.37%
Min Revenue beat(2)-6.57%
Max Revenue beat(2)-2.17%
Revenue beat(4)1
Avg Revenue beat(4)-2.91%
Min Revenue beat(4)-6.57%
Max Revenue beat(4)0.56%
Revenue beat(8)2
Avg Revenue beat(8)-2.43%
Revenue beat(12)6
Avg Revenue beat(12)-0.59%
Revenue beat(16)9
Avg Revenue beat(16)0.68%
PT rev (1m)0%
PT rev (3m)1.59%
EPS NQ rev (1m)0.27%
EPS NQ rev (3m)2.52%
EPS NY rev (1m)0%
EPS NY rev (3m)9.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.19%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.12 | ||
| Fwd PE | 9.98 | ||
| P/S | 0.93 | ||
| P/FCF | 6.04 | ||
| P/OCF | 5.98 | ||
| P/B | 1.76 | ||
| P/tB | 1.86 | ||
| EV/EBITDA | 7.22 |
EPS(TTM)18.63
EY10.96%
EPS(NY)17.04
Fwd EY10.02%
FCF(TTM)28.16
FCFY16.57%
OCF(TTM)28.42
OCFY16.72%
SpS182.63
BVpS96.3
TBVpS91.27
PEG (NY)0.25
PEG (5Y)0.88
Graham Number200.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.77% | ||
| ROE | 18.44% | ||
| ROCE | 5.28% | ||
| ROIC | 4.13% | ||
| ROICexc | 4.37% | ||
| ROICexgc | 5.31% | ||
| OM | 12.71% | ||
| PM (TTM) | 9.72% | ||
| GM | N/A | ||
| FCFM | 15.42% |
ROA(3y)1.29%
ROA(5y)1.89%
ROE(3y)7.13%
ROE(5y)9.18%
ROIC(3y)1.75%
ROIC(5y)2.21%
ROICexc(3y)1.8%
ROICexc(5y)2.25%
ROICexgc(3y)2.25%
ROICexgc(5y)2.82%
ROCE(3y)2.19%
ROCE(5y)2.75%
ROICexgc growth 3Y5.67%
ROICexgc growth 5Y0.09%
ROICexc growth 3Y6.4%
ROICexc growth 5Y0.53%
OM growth 3Y1.9%
OM growth 5Y-0.99%
PM growth 3Y-5.85%
PM growth 5Y-5.09%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.37 | ||
| Debt/FCF | 1.28 | ||
| Debt/EBITDA | 1.55 | ||
| Cap/Depr | 633.33% | ||
| Cap/Sales | 0.15% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 122.26% | ||
| Profit Quality | 158.54% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC8.25%
ROIC/WACC0.5
Cap/Depr(3y)335.62%
Cap/Depr(5y)227.22%
Cap/Sales(3y)0.23%
Cap/Sales(5y)0.23%
Profit Quality(3y)595.01%
Profit Quality(5y)434.59%
High Growth Momentum
Growth
EPS 1Y (TTM)67.24%
EPS 3Y15.11%
EPS 5Y10.31%
EPS Q2Q%66.89%
EPS Next Y36.2%
EPS Next 2Y13.05%
EPS Next 3Y10.33%
EPS Next 5YN/A
Revenue 1Y (TTM)5.45%
Revenue growth 3Y6.83%
Revenue growth 5Y5.41%
Sales Q2Q%-0.58%
Revenue Next Year5.18%
Revenue Next 2Y5.18%
Revenue Next 3Y5.2%
Revenue Next 5YN/A
EBIT growth 1Y68.34%
EBIT growth 3Y8.85%
EBIT growth 5Y4.37%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y120.71%
FCF growth 3Y-0.83%
FCF growth 5Y6.06%
OCF growth 1Y116.32%
OCF growth 3Y-0.73%
OCF growth 5Y5.86%
HANOVER INSURANCE GROUP INC/ / THG FAQ
What is the ChartMill fundamental rating of HANOVER INSURANCE GROUP INC/ (THG) stock?
ChartMill assigns a fundamental rating of 5 / 10 to THG.
Can you provide the valuation status for HANOVER INSURANCE GROUP INC/?
ChartMill assigns a valuation rating of 7 / 10 to HANOVER INSURANCE GROUP INC/ (THG). This can be considered as Undervalued.
What is the profitability of THG stock?
HANOVER INSURANCE GROUP INC/ (THG) has a profitability rating of 6 / 10.
Can you provide the financial health for THG stock?
The financial health rating of HANOVER INSURANCE GROUP INC/ (THG) is 3 / 10.
What is the earnings growth outlook for HANOVER INSURANCE GROUP INC/?
The Earnings per Share (EPS) of HANOVER INSURANCE GROUP INC/ (THG) is expected to grow by 36.2% in the next year.