HANOVER INSURANCE GROUP INC/ (THG)
US4108671052 - Common Stock
Taking everything into account, THG scores 3 out of 10 in our fundamental rating. THG was compared to 141 industry peers in the Insurance industry. THG may be in some trouble as it scores bad on both profitability and health. THG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
THG had positive earnings in the past year.
In the past year THG had a positive cash flow from operations.
In the past 5 years THG has always been profitable.
Each year in the past 5 years THG had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 0.24%, THG is not doing good in the industry: 65.00% of the companies in the same industry are doing better.
The Return On Equity of THG (1.43%) is worse than 66.43% of its industry peers.
The Return On Invested Capital of THG (0.58%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for THG is below the industry average of 4.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.24% | ||
| ROE | 1.43% | ||
| ROIC | 0.58% |
ROA(3y)1.34%
ROA(5y)2.02%
ROE(3y)6.57%
ROE(5y)9.1%
ROIC(3y)1.61%
ROIC(5y)2.23%
1.3 Margins
THG's Profit Margin of 0.59% is on the low side compared to the rest of the industry. THG is outperformed by 69.29% of its industry peers.
In the last couple of years the Profit Margin of THG has declined.
Looking at the Operating Margin, with a value of 1.64%, THG is doing worse than 70.00% of the companies in the same industry.
In the last couple of years the Operating Margin of THG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.64% | ||
| PM (TTM) | 0.59% | ||
| GM | N/A |
OM growth 3Y-45.87%
OM growth 5Y-28.67%
PM growth 3Y-57.06%
PM growth 5Y-41.56%
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.
The number of shares outstanding for THG has been increased compared to 1 year ago.
THG has less shares outstanding than it did 5 years ago.
THG has a better debt/assets ratio than last year.
2.2 Solvency
THG has a debt to FCF ratio of 2.24. This is a good value and a sign of high solvency as THG would need 2.24 years to pay back of all of its debts.
THG has a Debt to FCF ratio (2.24) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.32 indicates that THG is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.32, THG is doing good in the industry, outperforming 62.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 2.24 | ||
| Altman-Z | N/A |
ROIC/WACC0.07
WACC8.44%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
THG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -72.10%.
THG shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -27.20% yearly.
Looking at the last year, THG shows a quite strong growth in Revenue. The Revenue has grown by 8.44% in the last year.
THG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.78% yearly.
EPS 1Y (TTM)-72.1%
EPS 3Y-45.16%
EPS 5Y-27.2%
EPS growth Q2Q398.1%
Revenue 1Y (TTM)8.44%
Revenue growth 3Y7.52%
Revenue growth 5Y5.78%
Revenue growth Q2Q6%
3.2 Future
Based on estimates for the next years, THG will show a very strong growth in Earnings Per Share. The EPS will grow by 195.48% on average per year.
Based on estimates for the next years, THG will show a small growth in Revenue. The Revenue will grow by 4.89% on average per year.
EPS Next Y581.34%
EPS Next 2Y195.48%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year3.81%
Revenue Next 2Y4.89%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
A Price/Earnings ratio of 84.86 indicates a quite expensive valuation of THG.
Based on the Price/Earnings ratio, THG is valued a bit more expensive than the industry average as 73.57% of the companies are valued more cheaply.
THG is valuated expensively when we compare the Price/Earnings ratio to 28.06, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 12.45 indicates a correct valuation of THG.
THG's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.72, THG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 84.86 | ||
| Fwd PE | 12.45 |
4.2 Price Multiples
62.86% of the companies in the same industry are cheaper than THG, based on the Enterprise Value to EBITDA ratio.
THG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.42 | ||
| EV/EBITDA | 49.12 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as THG's earnings are expected to grow with 195.48% in the coming years.
PEG (NY)0.15
PEG (5Y)N/A
EPS Next 2Y195.48%
EPS Next 3YN/A
5. Dividend
5.1 Amount
THG has a Yearly Dividend Yield of 2.60%.
THG's Dividend Yield is a higher than the industry average which is at 4.23.
THG's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
5.2 History
The dividend of THG is nicely growing with an annual growth rate of 8.15%!
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)8.15%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
THG pays out 332.01% of its income as dividend. This is not a sustainable payout ratio.
THG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP332.01%
EPS Next 2Y195.48%
EPS Next 3YN/A
HANOVER INSURANCE GROUP INC/
NYSE:THG (5/2/2024, 7:22:37 PM)
After market: 130.68 0 (0%)130.68
-0.47 (-0.36%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap4.70B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 84.86 | ||
| Fwd PE | 12.45 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.24% | ||
| ROE | 1.43% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.64% | ||
| PM (TTM) | 0.59% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-72.1%
EPS 3Y-45.16%
EPS 5Y
EPS growth Q2Q
EPS Next Y581.34%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.44%
Revenue growth 3Y7.52%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y