TRAVELERS COS INC/THE (TRV) Stock Fundamental Analysis
NYSE:TRV - New York Stock Exchange, Inc. - US89417E1091 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to TRV. TRV was compared to 143 industry peers in the Insurance industry. While TRV belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. TRV has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
TRV had positive earnings in the past year.
In the past year TRV had a positive cash flow from operations.
TRV had positive earnings in each of the past 5 years.
In the past 5 years TRV always reported a positive cash flow from operatings.
1.2 Ratios
TRV's Return On Assets of 3.75% is fine compared to the rest of the industry. TRV outperforms 78.32% of its industry peers.
With an excellent Return On Equity value of 17.64%, TRV belongs to the best of the industry, outperforming 80.42% of the companies in the same industry.
With an excellent Return On Invested Capital value of 4.31%, TRV belongs to the best of the industry, outperforming 81.12% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TRV is in line with the industry average of 4.06%.
The last Return On Invested Capital (4.31%) for TRV is above the 3 year average (3.24%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.75% | ||
| ROE | 17.64% | ||
| ROIC | 4.31% |
ROA(3y)2.84%
ROA(5y)2.77%
ROE(3y)14.27%
ROE(5y)12.91%
ROIC(3y)3.24%
ROIC(5y)3.19%
1.3 Margins
TRV's Profit Margin of 10.88% is fine compared to the rest of the industry. TRV outperforms 69.93% of its industry peers.
In the last couple of years the Profit Margin of TRV has grown nicely.
TRV has a better Operating Margin (14.43%) than 66.43% of its industry peers.
In the last couple of years the Operating Margin of TRV has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.43% | ||
| PM (TTM) | 10.88% | ||
| GM | N/A |
OM growth 3Y0.94%
OM growth 5Y5.14%
PM growth 3Y0.78%
PM growth 5Y5.33%
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), TRV is destroying value.
The number of shares outstanding for TRV has been reduced compared to 1 year ago.
Compared to 5 years ago, TRV has less shares outstanding
TRV has a better debt/assets ratio than last year.
2.2 Solvency
TRV has a debt to FCF ratio of 0.83. This is a very positive value and a sign of high solvency as it would only need 0.83 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 0.83, TRV is doing good in the industry, outperforming 70.63% of the companies in the same industry.
A Debt/Equity ratio of 0.27 indicates that TRV is not too dependend on debt financing.
TRV's Debt to Equity ratio of 0.27 is fine compared to the rest of the industry. TRV outperforms 60.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 0.83 | ||
| Altman-Z | N/A |
ROIC/WACC0.51
WACC8.44%
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 41.15% over the past year.
TRV shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.60% yearly.
TRV shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.55%.
TRV shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.01% yearly.
EPS 1Y (TTM)41.15%
EPS 3Y15.59%
EPS 5Y17.6%
EPS Q2Q%159.36%
Revenue 1Y (TTM)8.55%
Revenue growth 3Y10.06%
Revenue growth 5Y8.01%
Sales Q2Q%3.85%
3.2 Future
The Earnings Per Share is expected to grow by 2.53% on average over the next years.
TRV is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.75% yearly.
EPS Next Y-11.27%
EPS Next 2Y7.03%
EPS Next 3Y7.48%
EPS Next 5Y2.53%
Revenue Next Year5.42%
Revenue Next 2Y5.69%
Revenue Next 3Y5.26%
Revenue Next 5Y3.75%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 11.18, the valuation of TRV can be described as very reasonable.
The rest of the industry has a similar Price/Earnings ratio as TRV.
TRV is valuated cheaply when we compare the Price/Earnings ratio to 27.93, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 10.31, the valuation of TRV can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TRV is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 37.78, TRV is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.18 | ||
| Fwd PE | 10.31 |
4.2 Price Multiples
TRV's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. TRV is cheaper than 82.52% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TRV is valued a bit cheaper than the industry average as 66.43% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.96 | ||
| EV/EBITDA | 4.36 |
4.3 Compensation for Growth
TRV has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.64
EPS Next 2Y7.03%
EPS Next 3Y7.48%
5. Dividend
5.1 Amount
TRV has a Yearly Dividend Yield of 1.66%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.29, TRV has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.32, TRV is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
5.2 History
The dividend of TRV has a limited annual growth rate of 5.20%.
TRV has paid a dividend for at least 10 years, which is a reliable track record.
TRV has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.2%
Div Incr Years19
Div Non Decr Years19
5.3 Sustainability
TRV pays out 18.59% of its income as dividend. This is a sustainable payout ratio.
TRV's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP18.59%
EPS Next 2Y7.03%
EPS Next 3Y7.48%
254.91
-6.14 (-2.35%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners85.01%
Inst Owner Change0.75%
Ins Owners0.36%
Ins Owner Change4.51%
Market Cap57.39B
Analysts69.29
Price Target289.75 (13.67%)
Short Float %1.47%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
Yearly Dividend4.18
Dividend Growth(5Y)5.2%
DP18.59%
Div Incr Years19
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)109.41%
Min EPS beat(2)76.17%
Max EPS beat(2)142.66%
EPS beat(4)4
Avg EPS beat(4)75.39%
Min EPS beat(4)36.67%
Max EPS beat(4)142.66%
EPS beat(8)6
Avg EPS beat(8)40.32%
EPS beat(12)7
Avg EPS beat(12)21.1%
EPS beat(16)11
Avg EPS beat(16)24.12%
Revenue beat(2)0
Avg Revenue beat(2)-3.32%
Min Revenue beat(2)-3.83%
Max Revenue beat(2)-2.8%
Revenue beat(4)0
Avg Revenue beat(4)-2.56%
Min Revenue beat(4)-3.83%
Max Revenue beat(4)-1.1%
Revenue beat(8)1
Avg Revenue beat(8)-2.2%
Revenue beat(12)5
Avg Revenue beat(12)0.1%
Revenue beat(16)9
Avg Revenue beat(16)2.2%
PT rev (1m)-0.04%
PT rev (3m)1.51%
EPS NQ rev (1m)6.69%
EPS NQ rev (3m)7.7%
EPS NY rev (1m)0.2%
EPS NY rev (3m)1.97%
Revenue NQ rev (1m)-1.5%
Revenue NQ rev (3m)-2.13%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.18 | ||
| Fwd PE | 10.31 | ||
| P/S | 1.2 | ||
| P/FCF | 5.96 | ||
| P/OCF | 5.96 | ||
| P/B | 1.94 | ||
| P/tB | 2.31 | ||
| EV/EBITDA | 4.36 |
EPS(TTM)22.81
EY8.95%
EPS(NY)24.73
Fwd EY9.7%
FCF(TTM)42.79
FCFY16.79%
OCF(TTM)42.79
OCFY16.79%
SpS212.52
BVpS131.12
TBVpS110.55
PEG (NY)N/A
PEG (5Y)0.64
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.75% | ||
| ROE | 17.64% | ||
| ROCE | 5.1% | ||
| ROIC | 4.31% | ||
| ROICexc | 4.34% | ||
| ROICexgc | 5% | ||
| OM | 14.43% | ||
| PM (TTM) | 10.88% | ||
| GM | N/A | ||
| FCFM | 20.13% |
ROA(3y)2.84%
ROA(5y)2.77%
ROE(3y)14.27%
ROE(5y)12.91%
ROIC(3y)3.24%
ROIC(5y)3.19%
ROICexc(3y)3.26%
ROICexc(5y)3.21%
ROICexgc(3y)3.79%
ROICexgc(5y)3.74%
ROCE(3y)3.82%
ROCE(5y)3.77%
ROICexcg growth 3Y6.65%
ROICexcg growth 5Y8.29%
ROICexc growth 3Y7.09%
ROICexc growth 5Y8.8%
OM growth 3Y0.94%
OM growth 5Y5.14%
PM growth 3Y0.78%
PM growth 5Y5.33%
GM growth 3YN/A
GM growth 5YN/A
F-Score9
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 0.83 | ||
| Debt/EBITDA | 0.54 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 17.62 | ||
| Cash Conversion | 65.21% | ||
| Profit Quality | 185.04% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score9
WACC8.44%
ROIC/WACC0.51
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)223.91%
Profit Quality(5y)223.05%
High Growth Momentum
Growth
EPS 1Y (TTM)41.15%
EPS 3Y15.59%
EPS 5Y17.6%
EPS Q2Q%159.36%
EPS Next Y-11.27%
EPS Next 2Y7.03%
EPS Next 3Y7.48%
EPS Next 5Y2.53%
Revenue 1Y (TTM)8.55%
Revenue growth 3Y10.06%
Revenue growth 5Y8.01%
Sales Q2Q%3.85%
Revenue Next Year5.42%
Revenue Next 2Y5.69%
Revenue Next 3Y5.26%
Revenue Next 5Y3.75%
EBIT growth 1Y40.28%
EBIT growth 3Y11.1%
EBIT growth 5Y13.56%
EBIT Next Year12.86%
EBIT Next 3Y9.96%
EBIT Next 5YN/A
FCF growth 1Y50.87%
FCF growth 3Y7.65%
FCF growth 5Y11.76%
OCF growth 1Y50.87%
OCF growth 3Y7.65%
OCF growth 5Y11.76%