HANOVER INSURANCE GROUP INC/ (THG) Stock Fundamental Analysis
NYSE:THG - New York Stock Exchange, Inc. - US4108671052 - Common Stock - Currency: USD
Taking everything into account, THG scores 4 out of 10 in our fundamental rating. THG was compared to 144 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
In the past year THG was profitable.
In the past year THG had a positive cash flow from operations.
Each year in the past 5 years THG has been profitable.
Of the past 5 years THG 4 years had a positive operating cash flow.
1.2 Ratios
THG's Return On Assets of 2.38% is in line compared to the rest of the industry. THG outperforms 52.11% of its industry peers.
The Return On Equity of THG (12.72%) is comparable to the rest of the industry.
With a decent Return On Invested Capital value of 2.70%, THG is doing good in the industry, outperforming 60.56% 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 4.55%.
The 3 year average ROIC (1.70%) for THG is below the current ROIC(2.70%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.38% | ||
| ROE | 12.72% | ||
| ROIC | 2.7% |
ROA(3y)1.28%
ROA(5y)1.89%
ROE(3y)7.13%
ROE(5y)9.18%
ROIC(3y)1.7%
ROIC(5y)2.17%
1.3 Margins
THG has a Profit Margin (5.94%) which is in line with its industry peers.
THG's Profit Margin has declined in the last couple of years.
THG has a Operating Margin of 7.96%. This is comparable to the rest of the industry: THG outperforms 42.25% of its industry peers.
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 | 7.96% | ||
| PM (TTM) | 5.94% | ||
| 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.
Compared to 1 year ago, THG has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of THG is 1.16, which is an excellent value as it means it would take THG, only 1.16 years of fcf income to pay off all of its debts.
THG's Debt to FCF ratio of 1.16 is fine compared to the rest of the industry. THG outperforms 63.38% of its industry peers.
A Debt/Equity ratio of 0.27 indicates that THG is not too dependend on debt financing.
THG has a better Debt to Equity ratio (0.27) than 63.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.16 | ||
| Altman-Z | N/A |
ROIC/WACC0.32
WACC8.37%
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 765.58%, which is quite impressive.
The Earnings Per Share has been growing by 10.31% on average over the past years. This is quite good.
THG shows a small growth in Revenue. In the last year, the Revenue has grown by 3.52%.
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)765.58%
EPS 3Y15.11%
EPS 5Y10.31%
EPS Q2Q%69.97%
Revenue 1Y (TTM)3.52%
Revenue growth 3Y6.83%
Revenue growth 5Y5.41%
Sales Q2Q%7.4%
3.2 Future
Based on estimates for the next years, THG will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.59% on average per year.
Based on estimates for the next years, THG will show a small growth in Revenue. The Revenue will grow by 6.78% on average per year.
EPS Next Y8.88%
EPS Next 2Y10.49%
EPS Next 3Y8.59%
EPS Next 5YN/A
Revenue Next Year7.49%
Revenue Next 2Y6.5%
Revenue Next 3Y6.78%
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 stable.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
THG is valuated reasonably with a Price/Earnings ratio of 11.92.
The rest of the industry has a similar Price/Earnings ratio as THG.
Compared to an average S&P500 Price/Earnings ratio of 29.62, THG is valued rather cheaply.
With a Price/Forward Earnings ratio of 10.95, the valuation of THG can be described as very reasonable.
THG's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.70. THG is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 10.95 |
4.2 Price Multiples
THG's Enterprise Value to EBITDA is on the same level as the industry average.
THG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.44 | ||
| EV/EBITDA | 12.12 |
4.3 Compensation for Growth
THG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.34
PEG (5Y)1.16
EPS Next 2Y10.49%
EPS Next 3Y8.59%
5. Dividend
5.1 Amount
THG has a Yearly Dividend Yield of 2.27%.
Compared to an average industry Dividend Yield of 3.17, THG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.27, THG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.27% |
5.2 History
On average, the dividend of THG grows each year by 8.15%, 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 last 3 years.
Dividend Growth(5Y)8.15%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
THG pays out 33.33% of its income as dividend. This is a sustainable payout ratio.
THG's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP33.33%
EPS Next 2Y10.49%
EPS Next 3Y8.59%
NYSE:THG (2/24/2025, 2:48:40 PM)
158.885
+2.31 (+1.48%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners89.55%
Inst Owner Change-86.36%
Ins Owners0.76%
Ins Owner Change-4.82%
Market Cap5.70B
Analysts75
Price Target183.31 (15.37%)
Short Float %0.95%
Short Ratio1.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.27% |
Yearly Dividend3.28
Dividend Growth(5Y)8.15%
DP33.33%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.86%
Min EPS beat(2)0.55%
Max EPS beat(2)19.17%
EPS beat(4)4
Avg EPS beat(4)11.51%
Min EPS beat(4)0.55%
Max EPS beat(4)19.17%
EPS beat(8)5
Avg EPS beat(8)-16.09%
EPS beat(12)9
Avg EPS beat(12)-6.69%
EPS beat(16)12
Avg EPS beat(16)2.25%
Revenue beat(2)1
Avg Revenue beat(2)-0.21%
Min Revenue beat(2)-1.16%
Max Revenue beat(2)0.74%
Revenue beat(4)1
Avg Revenue beat(4)-1.96%
Min Revenue beat(4)-5.65%
Max Revenue beat(4)0.74%
Revenue beat(8)5
Avg Revenue beat(8)0.57%
Revenue beat(12)8
Avg Revenue beat(12)1.88%
Revenue beat(16)11
Avg Revenue beat(16)2.39%
PT rev (1m)2.86%
PT rev (3m)5.82%
EPS NQ rev (1m)0.02%
EPS NQ rev (3m)0.02%
EPS NY rev (1m)4.9%
EPS NY rev (3m)4.76%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)1.82%
Revenue NY rev (3m)3.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.92 | ||
| Fwd PE | 10.95 | ||
| P/S | 0.93 | ||
| P/FCF | 8.44 | ||
| P/OCF | 8.32 | ||
| P/B | 1.98 | ||
| P/tB | 2.11 | ||
| EV/EBITDA | 12.12 |
EPS(TTM)13.33
EY8.39%
EPS(NY)14.51
Fwd EY9.13%
FCF(TTM)18.82
FCFY11.85%
OCF(TTM)19.09
OCFY12.01%
SpS171.64
BVpS80.16
TBVpS75.18
PEG (NY)1.34
PEG (5Y)1.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.38% | ||
| ROE | 12.72% | ||
| ROCE | 3.36% | ||
| ROIC | 2.7% | ||
| ROICexc | 2.78% | ||
| ROICexgc | 3.42% | ||
| OM | 7.96% | ||
| PM (TTM) | 5.94% | ||
| GM | N/A | ||
| FCFM | 10.97% |
ROA(3y)1.28%
ROA(5y)1.89%
ROE(3y)7.13%
ROE(5y)9.18%
ROIC(3y)1.7%
ROIC(5y)2.17%
ROICexc(3y)1.74%
ROICexc(5y)2.22%
ROICexgc(3y)2.25%
ROICexgc(5y)2.83%
ROCE(3y)2.12%
ROCE(5y)2.71%
ROICexcg growth 3Y5.78%
ROICexcg growth 5Y0.15%
ROICexc growth 3Y4.45%
ROICexc growth 5Y-0.58%
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-Score7
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 1.16 | ||
| Debt/EBITDA | 1.59 | ||
| Cap/Depr | 324.14% | ||
| Cap/Sales | 0.15% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 138.87% | ||
| Profit Quality | 184.65% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score7
WACC8.37%
ROIC/WACC0.32
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)765.58%
EPS 3Y15.11%
EPS 5Y10.31%
EPS Q2Q%69.97%
EPS Next Y8.88%
EPS Next 2Y10.49%
EPS Next 3Y8.59%
EPS Next 5YN/A
Revenue 1Y (TTM)3.52%
Revenue growth 3Y6.83%
Revenue growth 5Y5.41%
Sales Q2Q%7.4%
Revenue Next Year7.49%
Revenue Next 2Y6.5%
Revenue Next 3Y6.78%
Revenue Next 5YN/A
EBIT growth 1Y580.41%
EBIT growth 3Y8.85%
EBIT growth 5Y4.37%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y48.89%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y46.57%
OCF growth 3YN/A
OCF growth 5YN/A