HANOVER INSURANCE GROUP INC/ (THG) Fundamental Analysis & Valuation

NYSE:THG • US4108671052

Current stock price

179.61 USD
+2.83 (+1.6%)
Last:

This THG fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

6

1. THG Profitability Analysis

1.1 Basic Checks

  • THG had positive earnings in the past year.
  • In the past year THG had a positive cash flow from operations.
  • Each year in the past 5 years THG has been profitable.
  • THG had a positive operating cash flow in each of the past 5 years.
THG Yearly Net Income VS EBIT VS OCF VS FCFTHG Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B

1.2 Ratios

  • The Return On Assets of THG (3.91%) is better than 70.27% of its industry peers.
  • THG has a Return On Equity of 18.55%. This is in the better half of the industry: THG outperforms 77.70% of its industry peers.
  • THG has a better Return On Invested Capital (4.25%) than 68.24% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for THG is significantly below the industry average of 9.50%.
  • The 3 year average ROIC (2.62%) for THG is below the current ROIC(4.25%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 3.91%
ROE 18.55%
ROIC 4.25%
ROA(3y)2.31%
ROA(5y)2.14%
ROE(3y)11.66%
ROE(5y)10.65%
ROIC(3y)2.62%
ROIC(5y)2.39%
THG Yearly ROA, ROE, ROICTHG Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15

1.3 Margins

  • THG's Profit Margin of 10.07% is in line compared to the rest of the industry. THG outperforms 58.11% of its industry peers.
  • THG's Profit Margin has improved in the last couple of years.
  • THG's Operating Margin of 13.24% is in line compared to the rest of the industry. THG outperforms 54.73% of its industry peers.
  • In the last couple of years the Operating Margin of THG has grown nicely.
Industry RankSector Rank
OM 13.24%
PM (TTM) 10.07%
GM N/A
OM growth 3Y41.73%
OM growth 5Y5.05%
PM growth 3Y68.88%
PM growth 5Y6.33%
GM growth 3YN/A
GM growth 5YN/A
THG Yearly Profit, Operating, Gross MarginsTHG Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8 10

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3

2. THG Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so THG is destroying value.
  • THG has less shares outstanding than it did 1 year ago.
  • THG has less shares outstanding than it did 5 years ago.
  • THG has a worse debt/assets ratio than last year.
THG Yearly Shares OutstandingTHG Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10M 20M 30M 40M
THG Yearly Total Debt VS Total AssetsTHG Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B

2.2 Solvency

  • The Debt to FCF ratio of THG is 1.04, which is an excellent value as it means it would take THG, only 1.04 years of fcf income to pay off all of its debts.
  • Looking at the Debt to FCF ratio, with a value of 1.04, THG is in the better half of the industry, outperforming 65.54% of the companies in the same industry.
  • THG has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
  • THG has a Debt to Equity ratio (0.34) which is in line with its industry peers.
Industry RankSector Rank
Debt/Equity 0.34
Debt/FCF 1.04
Altman-Z N/A
ROIC/WACC0.53
WACC8.07%
THG Yearly LT Debt VS Equity VS FCFTHG Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
THG Yearly Current Assets VS Current LiabilitesTHG Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

4

3. THG Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an impressive 43.29% over the past year.
  • Measured over the past years, THG shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.38% on average per year.
  • THG shows a small growth in Revenue. In the last year, the Revenue has grown by 5.61%.
  • THG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.33% yearly.
EPS 1Y (TTM)43.29%
EPS 3Y51.25%
EPS 5Y15.38%
EPS Q2Q%8.83%
Revenue 1Y (TTM)5.61%
Revenue growth 3Y5.84%
Revenue growth 5Y6.33%
Sales Q2Q%3.01%

3.2 Future

  • Based on estimates for the next years, THG will show a decrease in Earnings Per Share. The EPS will decrease by -2.18% on average per year.
  • The Revenue is expected to grow by 5.61% on average over the next years.
EPS Next Y-9.7%
EPS Next 2Y-2.05%
EPS Next 3Y-2.18%
EPS Next 5YN/A
Revenue Next Year4.52%
Revenue Next 2Y4.38%
Revenue Next 3Y5.61%
Revenue Next 5YN/A

3.3 Evolution

  • The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
THG Yearly Revenue VS EstimatesTHG Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2B 4B 6B
THG Yearly EPS VS EstimatesTHG Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 5 10 15

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5

4. THG Valuation Analysis

4.1 Price/Earnings Ratio

  • A Price/Earnings ratio of 9.40 indicates a reasonable valuation of THG.
  • THG's Price/Earnings ratio is a bit cheaper when compared to the industry. THG is cheaper than 62.84% of the companies in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 26.86, THG is valued rather cheaply.
  • Based on the Price/Forward Earnings ratio of 10.41, the valuation of THG can be described as 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 (37.39), we can say THG is valued rather cheaply.
Industry RankSector Rank
PE 9.4
Fwd PE 10.41
THG Price Earnings VS Forward Price EarningsTHG Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • Based on the Price/Free Cash Flow ratio, THG is valued a bit cheaper than the industry average as 64.86% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 5.4
EV/EBITDA N/A
THG Per share dataTHG EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 50 100 150

4.3 Compensation for Growth

  • THG has a very decent profitability rating, which may justify a higher PE ratio.
  • A cheap valuation may be justified as THG's earnings are expected to decrease with -2.18% in the coming years.
PEG (NY)N/A
PEG (5Y)0.61
EPS Next 2Y-2.05%
EPS Next 3Y-2.18%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

5

5. THG Dividend Analysis

5.1 Amount

  • THG has a Yearly Dividend Yield of 2.11%.
  • THG's Dividend Yield is comparable with the industry average which is at 2.44.
  • THG's Dividend Yield is comparable with the S&P500 average which is at 1.82.
Industry RankSector Rank
Dividend Yield 2.11%

5.2 History

  • On average, the dividend of THG grows each year by 6.38%, which is quite nice.
  • 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 past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)6.38%
Div Incr Years5
Div Non Decr Years5
THG Yearly Dividends per shareTHG Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6 8

5.3 Sustainability

  • 19.71% of the earnings are spent on dividend by THG. This is a low number and sustainable payout ratio.
DP19.71%
EPS Next 2Y-2.05%
EPS Next 3Y-2.18%
THG Yearly Income VS Free CF VS DividendTHG Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B
THG Dividend Payout.THG Dividend Payout, showing the Payout Ratio.THG Dividend Payout.PayoutRetained Earnings

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THG Fundamentals: All Metrics, Ratios and Statistics

HANOVER INSURANCE GROUP INC/

NYSE:THG (4/13/2026, 3:40:07 PM)

179.61

+2.83 (+1.6%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)02-03
Earnings (Next)04-29
Inst Owners90.99%
Inst Owner Change0.1%
Ins Owners0.93%
Ins Owner Change2.57%
Market Cap6.32B
Revenue(TTM)6.58B
Net Income(TTM)662.50M
Analysts78.18
Price Target205.19 (14.24%)
Short Float %2.4%
Short Ratio2.43
Dividend
Industry RankSector Rank
Dividend Yield 2.11%
Yearly Dividend3.66
Dividend Growth(5Y)6.38%
DP19.71%
Div Incr Years5
Div Non Decr Years5
Ex-Date03-13
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)17.58%
Min EPS beat(2)15.67%
Max EPS beat(2)19.49%
EPS beat(4)4
Avg EPS beat(4)21.02%
Min EPS beat(4)11.06%
Max EPS beat(4)37.85%
EPS beat(8)8
Avg EPS beat(8)21.62%
EPS beat(12)9
Avg EPS beat(12)0.91%
EPS beat(16)13
Avg EPS beat(16)1.5%
Revenue beat(2)0
Avg Revenue beat(2)-4.89%
Min Revenue beat(2)-6.57%
Max Revenue beat(2)-3.21%
Revenue beat(4)0
Avg Revenue beat(4)-3.86%
Min Revenue beat(4)-6.57%
Max Revenue beat(4)-2.17%
Revenue beat(8)2
Avg Revenue beat(8)-2.13%
Revenue beat(12)5
Avg Revenue beat(12)-1.64%
Revenue beat(16)8
Avg Revenue beat(16)-0.08%
PT rev (1m)0.3%
PT rev (3m)0.52%
EPS NQ rev (1m)-1.57%
EPS NQ rev (3m)-4.39%
EPS NY rev (1m)-0.27%
EPS NY rev (3m)1.24%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.81%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.63%
Valuation
Industry RankSector Rank
PE 9.4
Fwd PE 10.41
P/S 0.96
P/FCF 5.4
P/OCF 5.36
P/B 1.77
P/tB 1.86
EV/EBITDA N/A
EPS(TTM)19.1
EY10.63%
EPS(NY)17.25
Fwd EY9.6%
FCF(TTM)33.26
FCFY18.52%
OCF(TTM)33.48
OCFY18.64%
SpS186.95
BVpS101.49
TBVpS96.41
PEG (NY)N/A
PEG (5Y)0.61
Graham Number208.85
Profitability
Industry RankSector Rank
ROA 3.91%
ROE 18.55%
ROCE 5.53%
ROIC 4.25%
ROICexc 4.57%
ROICexgc 5.57%
OM 13.24%
PM (TTM) 10.07%
GM N/A
FCFM 17.79%
ROA(3y)2.31%
ROA(5y)2.14%
ROE(3y)11.66%
ROE(5y)10.65%
ROIC(3y)2.62%
ROIC(5y)2.39%
ROICexc(3y)2.77%
ROICexc(5y)2.5%
ROICexgc(3y)3.4%
ROICexgc(5y)3.1%
ROCE(3y)3.38%
ROCE(5y)3.07%
ROICexgc growth 3Y41.22%
ROICexgc growth 5Y7.34%
ROICexc growth 3Y42.82%
ROICexc growth 5Y7.91%
OM growth 3Y41.73%
OM growth 5Y5.05%
PM growth 3Y68.88%
PM growth 5Y6.33%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.39
Health
Industry RankSector Rank
Debt/Equity 0.34
Debt/FCF 1.04
Debt/EBITDA N/A
Cap/Depr N/A
Cap/Sales 0.12%
Interest Coverage 26.17
Cash Conversion N/A
Profit Quality 176.68%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score7
WACC8.07%
ROIC/WACC0.53
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)0.16%
Cap/Sales(5y)0.19%
Profit Quality(3y)451.46%
Profit Quality(5y)431.3%
High Growth Momentum
Growth
EPS 1Y (TTM)43.29%
EPS 3Y51.25%
EPS 5Y15.38%
EPS Q2Q%8.83%
EPS Next Y-9.7%
EPS Next 2Y-2.05%
EPS Next 3Y-2.18%
EPS Next 5YN/A
Revenue 1Y (TTM)5.61%
Revenue growth 3Y5.84%
Revenue growth 5Y6.33%
Sales Q2Q%3.01%
Revenue Next Year4.52%
Revenue Next 2Y4.38%
Revenue Next 3Y5.61%
Revenue Next 5YN/A
EBIT growth 1Y54.62%
EBIT growth 3Y50.01%
EBIT growth 5Y11.7%
EBIT Next YearN/A
EBIT Next 3Y1.04%
EBIT Next 5YN/A
FCF growth 1Y47.12%
FCF growth 3Y18.44%
FCF growth 5Y11.06%
OCF growth 1Y46.21%
OCF growth 3Y17.72%
OCF growth 5Y10.74%

HANOVER INSURANCE GROUP INC/ / THG Fundamental Analysis 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 5 / 10 to HANOVER INSURANCE GROUP INC/ (THG). This can be considered as Fairly Valued.


How profitable is HANOVER INSURANCE GROUP INC/ (THG) stock?

HANOVER INSURANCE GROUP INC/ (THG) has a profitability rating of 6 / 10.


What is the valuation of HANOVER INSURANCE GROUP INC/ based on its PE and PB ratios?

The Price/Earnings (PE) ratio for HANOVER INSURANCE GROUP INC/ (THG) is 9.4 and the Price/Book (PB) ratio is 1.77.


Can you provide the expected EPS growth for THG stock?

The Earnings per Share (EPS) of HANOVER INSURANCE GROUP INC/ (THG) is expected to decline by -9.7% in the next year.