HANOVER INSURANCE GROUP INC/ (THG) Stock Fundamental Analysis
USA - NYSE:THG - US4108671052 - Common Stock
180.37 USD
-1.73 (-0.95%)
180.37 USD
0 (0%)
Taking everything into account, THG scores 5 out of 10 in our fundamental rating. THG was compared to 146 industry peers in the Insurance industry. There are concerns on the financial health of THG while its profitability can be described as average. THG has a correct valuation and a medium 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.
Each year in the past 5 years THG has been profitable.
Each year in the past 5 years THG had a positive operating cash flow.
1.2 Ratios
THG has a better Return On Assets (2.84%) than 65.07% of its industry peers.
Looking at the Return On Equity, with a value of 14.41%, THG is in the better half of the industry, outperforming 69.86% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.16%, THG is in the better half of the industry, outperforming 65.75% of the companies in the same industry.
THG had an Average Return On Invested Capital over the past 3 years of 1.75%. This is below the industry average of 4.47%.
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 (6.98%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of THG has declined.
The Operating Margin of THG (9.29%) is comparable to the rest of the industry.
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 | 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so THG is destroying value.
Compared to 1 year ago, THG has more shares outstanding
THG has less shares outstanding than it did 5 years ago.
THG has a better debt/assets ratio than last year.
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 65.75% of its industry peers.
A Debt/Equity ratio of 0.26 indicates that THG is not too dependend on debt financing.
THG's Debt to Equity ratio of 0.26 is fine compared to the rest of the industry. THG outperforms 60.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 1.01 | ||
| Altman-Z | N/A |
ROIC/WACC0.39
WACC8.13%
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.
THG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.31% yearly.
THG shows a small growth in Revenue. In the last year, the Revenue has grown by 4.39%.
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 9.24% yearly.
THG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.08% yearly.
EPS Next Y24.7%
EPS Next 2Y12.24%
EPS Next 3Y9.24%
EPS Next 5YN/A
Revenue Next Year5.61%
Revenue Next 2Y5.51%
Revenue Next 3Y5.08%
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
The Price/Earnings ratio is 10.87, which indicates a very decent valuation of THG.
Based on the Price/Earnings ratio, THG is valued a bit cheaper than the industry average as 61.64% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of THG to the average of the S&P500 Index (27.30), we can say THG is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.74, the valuation of THG can be described as very reasonable.
THG's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of THG to the average of the S&P500 Index (22.73), we can say THG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.87 | ||
| Fwd PE | 10.74 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as THG.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of THG indicates a somewhat cheap valuation: THG is cheaper than 60.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.3 | ||
| EV/EBITDA | 11.82 |
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.
PEG (NY)0.44
PEG (5Y)1.05
EPS Next 2Y12.24%
EPS Next 3Y9.24%
5. Dividend
5.1 Amount
THG has a Yearly Dividend Yield of 1.98%.
Compared to an average industry Dividend Yield of 3.53, THG has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, THG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
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 2Y12.24%
EPS Next 3Y9.24%
180.37
-1.73 (-0.95%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners90.3%
Inst Owner Change-3.86%
Ins Owners0.85%
Ins Owner Change0.61%
Market Cap6.45B
Analysts76.67
Price Target200.94 (11.4%)
Short Float %1.61%
Short Ratio2.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
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)0.15%
PT rev (3m)4.73%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.49%
EPS NY rev (1m)10.88%
EPS NY rev (3m)11.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)-0.31%
Revenue NY rev (3m)-0.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.87 | ||
| Fwd PE | 10.74 | ||
| P/S | 1.03 | ||
| P/FCF | 8.3 | ||
| P/OCF | 8.2 | ||
| P/B | 2.12 | ||
| P/tB | 2.25 | ||
| EV/EBITDA | 11.82 |
EPS(TTM)16.59
EY9.2%
EPS(NY)16.79
Fwd EY9.31%
FCF(TTM)21.72
FCFY12.04%
OCF(TTM)21.99
OCFY12.19%
SpS175.76
BVpS85.11
TBVpS80.11
PEG (NY)0.44
PEG (5Y)1.05
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
WACC8.13%
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 Y24.7%
EPS Next 2Y12.24%
EPS Next 3Y9.24%
EPS Next 5YN/A
Revenue 1Y (TTM)4.39%
Revenue growth 3Y6.83%
Revenue growth 5Y5.41%
Sales Q2Q%4.12%
Revenue Next Year5.61%
Revenue Next 2Y5.51%
Revenue Next 3Y5.08%
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%