HANOVER INSURANCE GROUP INC/ (THG) Stock Fundamental Analysis
USA - NYSE:THG - US4108671052 - Common Stock
171.13 USD
+2.65 (+1.57%)
171.13 USD
0 (0%)
Overall THG gets a fundamental rating of 5 out of 10. We evaluated THG against 145 industry peers in the Insurance industry. THG has a medium profitability rating, but doesn't score so well on its financial health evaluation. THG is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
THG had positive earnings in the past year.
THG had a positive operating cash flow in the past year.
THG had positive earnings in each of the past 5 years.
In the past 5 years THG always reported a positive cash flow from operatings.
1.2 Ratios
THG's Return On Assets of 2.84% is fine compared to the rest of the industry. THG outperforms 63.95% of its industry peers.
THG's Return On Equity of 14.41% is fine compared to the rest of the industry. THG outperforms 69.39% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.16%, THG is in the better half of the industry, outperforming 63.95% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for THG is below the industry average of 4.40%.
The 3 year average ROIC (1.75%) for THG is below the current ROIC(3.16%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.84% | ||
| ROE | 14.41% | ||
| ROIC | 3.16% |
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
THG has a Profit Margin of 6.98%. This is comparable to the rest of the industry: THG outperforms 46.94% of its industry peers.
In the last couple of years the Profit Margin of THG has declined.
THG has a Operating Margin of 9.29%. This is comparable to the rest of the industry: THG outperforms 41.50% of its industry peers.
THG's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.29% | ||
| PM (TTM) | 6.98% | ||
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), THG is destroying value.
Compared to 1 year ago, THG has more shares outstanding
The number of shares outstanding for THG has been reduced compared to 5 years ago.
The debt/assets ratio for THG has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of THG is 1.01, which is an excellent value as it means it would take THG, only 1.01 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of THG (1.01) is better than 66.67% of its industry peers.
THG has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of THG (0.26) is better than 61.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 1.01 | ||
| Altman-Z | N/A |
ROIC/WACC0.39
WACC8.06%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
THG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 100.36%, which is quite impressive.
The Earnings Per Share has been growing by 10.31% on average over the past years. This is quite good.
The Revenue has been growing slightly by 4.39% in the past year.
Measured over the past years, THG shows a small growth in Revenue. The Revenue has been growing by 5.41% on average per year.
EPS 1Y (TTM)100.36%
EPS 3Y15.11%
EPS 5Y10.31%
EPS Q2Q%131.38%
Revenue 1Y (TTM)4.39%
Revenue growth 3Y6.83%
Revenue growth 5Y5.41%
Sales Q2Q%4.12%
3.2 Future
THG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.49% yearly.
Based on estimates for the next years, THG will show a small growth in Revenue. The Revenue will grow by 5.07% on average per year.
EPS Next Y24.83%
EPS Next 2Y12.39%
EPS Next 3Y9.49%
EPS Next 5YN/A
Revenue Next Year5.65%
Revenue Next 2Y5.52%
Revenue Next 3Y5.07%
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
Based on the Price/Earnings ratio of 10.32, the valuation of THG can be described as reasonable.
The rest of the industry has a similar Price/Earnings ratio as THG.
When comparing the Price/Earnings ratio of THG to the average of the S&P500 Index (27.40), we can say THG is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.16, the valuation of THG can be described as reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as THG.
When comparing the Price/Forward Earnings ratio of THG to the average of the S&P500 Index (22.94), we can say THG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.32 | ||
| Fwd PE | 10.16 |
4.2 Price Multiples
THG's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, THG is valued a bit cheaper than the industry average as 61.90% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.88 | ||
| EV/EBITDA | 11.15 |
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.
PEG (NY)0.42
PEG (5Y)1
EPS Next 2Y12.39%
EPS Next 3Y9.49%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.14%, THG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.20, THG has a dividend in line with its industry peers.
THG's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.14% |
5.2 History
The dividend of THG decreases each year by -18.55%.
THG has paid a dividend for at least 10 years, which is 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
28.72% of the earnings are spent on dividend by THG. This is a low number and sustainable payout ratio.
DP28.72%
EPS Next 2Y12.39%
EPS Next 3Y9.49%
171.13
+2.65 (+1.57%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners91.67%
Inst Owner Change0.02%
Ins Owners0.86%
Ins Owner Change0.61%
Market Cap6.12B
Analysts78.18
Price Target200.94 (17.42%)
Short Float %1.69%
Short Ratio2.52
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.14% |
Yearly Dividend3.46
Dividend Growth(5Y)-18.55%
DP28.72%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)33.79%
Min EPS beat(2)11.06%
Max EPS beat(2)56.53%
EPS beat(4)4
Avg EPS beat(4)21.83%
Min EPS beat(4)0.55%
Max EPS beat(4)56.53%
EPS beat(8)6
Avg EPS beat(8)0.76%
EPS beat(12)9
Avg EPS beat(12)-4.54%
EPS beat(16)12
Avg EPS beat(16)-0.15%
Revenue beat(2)1
Avg Revenue beat(2)-1.45%
Min Revenue beat(2)-3.46%
Max Revenue beat(2)0.56%
Revenue beat(4)2
Avg Revenue beat(4)-0.83%
Min Revenue beat(4)-3.46%
Max Revenue beat(4)0.74%
Revenue beat(8)4
Avg Revenue beat(8)-1.16%
Revenue beat(12)7
Avg Revenue beat(12)0.37%
Revenue beat(16)10
Avg Revenue beat(16)1.31%
PT rev (1m)0%
PT rev (3m)3.92%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.53%
EPS NY rev (1m)0.1%
EPS NY rev (3m)11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.32 | ||
| Fwd PE | 10.16 | ||
| P/S | 0.97 | ||
| P/FCF | 7.88 | ||
| P/OCF | 7.78 | ||
| P/B | 2.01 | ||
| P/tB | 2.14 | ||
| EV/EBITDA | 11.15 |
EPS(TTM)16.59
EY9.69%
EPS(NY)16.84
Fwd EY9.84%
FCF(TTM)21.72
FCFY12.69%
OCF(TTM)21.99
OCFY12.85%
SpS175.76
BVpS85.11
TBVpS80.11
PEG (NY)0.42
PEG (5Y)1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.84% | ||
| ROE | 14.41% | ||
| ROCE | 3.95% | ||
| ROIC | 3.16% | ||
| ROICexc | 3.23% | ||
| ROICexgc | 3.99% | ||
| OM | 9.29% | ||
| PM (TTM) | 6.98% | ||
| GM | N/A | ||
| FCFM | 12.36% |
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%
ROICexcg growth 3Y5.67%
ROICexcg 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 Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 1.01 | ||
| Debt/EBITDA | 1.34 | ||
| Cap/Depr | 626.67% | ||
| Cap/Sales | 0.15% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 134.31% | ||
| Profit Quality | 177.14% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC8.06%
ROIC/WACC0.39
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)100.36%
EPS 3Y15.11%
EPS 5Y10.31%
EPS Q2Q%131.38%
EPS Next Y24.83%
EPS Next 2Y12.39%
EPS Next 3Y9.49%
EPS Next 5YN/A
Revenue 1Y (TTM)4.39%
Revenue growth 3Y6.83%
Revenue growth 5Y5.41%
Sales Q2Q%4.12%
Revenue Next Year5.65%
Revenue Next 2Y5.52%
Revenue Next 3Y5.07%
Revenue Next 5YN/A
EBIT growth 1Y150.79%
EBIT growth 3Y8.85%
EBIT growth 5Y4.37%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y48.33%
FCF growth 3Y-0.83%
FCF growth 5Y6.06%
OCF growth 1Y45.57%
OCF growth 3Y-0.73%
OCF growth 5Y5.86%