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Why Is The Hartford (HIG) Up 6.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for The Hartford (HIG - Free Report) . Shares have added about 6.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is The Hartford due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hartford Financial Q2 Earnings Beat Estimates, Up Y/Y
Hartford Financial reported second-quarter 2021 adjusted operating earnings of $2.33 per share, which outpaced the Zacks Consensus Estimate by 75.2%. The bottom line surged 91% year over year.
The company’s results gained momentum on the back of improved net investment income, lower COVID-19 related losses, reduced current accident year (CAY) CAT losses, rise in Commercial Lines earned premium and improved underlying ex-COVID-19 property and casualty (P&C) loss ratio. However, the results were partly offset by fall in favorable P&C prior accident year development (PYD) core earnings, higher underlying Personal Lines loss ratio and equity interest retained in Talcott Resolution resulting in a loss within core earnings.
In the quarter under review, total operating revenues improved 11.5% year over year to $3.6 billion. The top line beat the consensus mark by 5.1%.
Net investment income soared 71% year over year to $581 million in the quarter driven by increased invested assets, and uptick in limited partnerships and alternative investments (LPs) income.
Segmental Results
Property & Casualty (P&C)
Commercial Lines
During the quarter under review, the segment’s total revenues advanced 14.8% year over year to $2.8 billion. The segment reported core earnings of $560 million against the prior-year quarter’s core loss of $57 million. Underlying combined ratio came in at 89.4%, which improved 1,350 basis points (bps) year over year.
Personal Lines
Total revenues of $813 million climbed 7% year over year. Core earnings plunged 69% year over year to $113 million in the quarter under review due to lower underlying underwriting gain and less favorable PYD, partly mitigated by reduced CAY CAT losses and increased net investment income. Underlying combined ratio deteriorated 750 bps year over year to 88.2% in the quarter under review.
P&C Other Ops
Revenues of $23 million soared 91.7% year over year in the second quarter.
Group Benefits
Group Benefits segment revenues totaled $1.6 billion, which rose 4.8% year over year. Core earnings of $149 million climbed 46% year over year in second quarter driven by improved net investment income and drop in excess mortality.
Hartford Funds
Hartford Funds reported operating revenues of $298 million, up 26.3% year over year. Core earnings surged 55% year over year to $51 million, courtesy of growth in daily average Hartford Funds assets under management (AUM).
Corporate
Operating revenues of $76 million slumped 32.7% year over year in the quarter under review. The segment’s core loss of $52 million was wider than the prior-year quarter’s loss of $6 million.
Financial Update
As of Jun 30, 2021, book value per share of $50.62 grew 9% year over year. Core earnings’ return on equity improved 40 bps year over year bps to 13.1%. in the quarter under review.
Share Repurchase and Dividend Update
The company rewarded shareholders with share buybacks to the tune of $568 million and common dividends worth $126 million during the second quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 7.99% due to these changes.
VGM Scores
Currently, The Hartford has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise The Hartford has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is The Hartford (HIG) Up 6.4% Since Last Earnings Report?
A month has gone by since the last earnings report for The Hartford (HIG - Free Report) . Shares have added about 6.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is The Hartford due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hartford Financial Q2 Earnings Beat Estimates, Up Y/Y
Hartford Financial reported second-quarter 2021 adjusted operating earnings of $2.33 per share, which outpaced the Zacks Consensus Estimate by 75.2%. The bottom line surged 91% year over year.
The company’s results gained momentum on the back of improved net investment income, lower COVID-19 related losses, reduced current accident year (CAY) CAT losses, rise in Commercial Lines earned premium and improved underlying ex-COVID-19 property and casualty (P&C) loss ratio. However, the results were partly offset by fall in favorable P&C prior accident year development (PYD) core earnings, higher underlying Personal Lines loss ratio and equity interest retained in Talcott Resolution resulting in a loss within core earnings.
In the quarter under review, total operating revenues improved 11.5% year over year to $3.6 billion. The top line beat the consensus mark by 5.1%.
Net investment income soared 71% year over year to $581 million in the quarter driven by increased invested assets, and uptick in limited partnerships and alternative investments (LPs) income.
Segmental Results
Property & Casualty (P&C)
Commercial Lines
During the quarter under review, the segment’s total revenues advanced 14.8% year over year to $2.8 billion. The segment reported core earnings of $560 million against the prior-year quarter’s core loss of $57 million. Underlying combined ratio came in at 89.4%, which improved 1,350 basis points (bps) year over year.
Personal Lines
Total revenues of $813 million climbed 7% year over year. Core earnings plunged 69% year over year to $113 million in the quarter under review due to lower underlying underwriting gain and less favorable PYD, partly mitigated by reduced CAY CAT losses and increased net investment income. Underlying combined ratio deteriorated 750 bps year over year to 88.2% in the quarter under review.
P&C Other Ops
Revenues of $23 million soared 91.7% year over year in the second quarter.
Group Benefits
Group Benefits segment revenues totaled $1.6 billion, which rose 4.8% year over year. Core earnings of $149 million climbed 46% year over year in second quarter driven by improved net investment income and drop in excess mortality.
Hartford Funds
Hartford Funds reported operating revenues of $298 million, up 26.3% year over year. Core earnings surged 55% year over year to $51 million, courtesy of growth in daily average Hartford Funds assets under management (AUM).
Corporate
Operating revenues of $76 million slumped 32.7% year over year in the quarter under review. The segment’s core loss of $52 million was wider than the prior-year quarter’s loss of $6 million.
Financial Update
As of Jun 30, 2021, book value per share of $50.62 grew 9% year over year. Core earnings’ return on equity improved 40 bps year over year bps to 13.1%. in the quarter under review.
Share Repurchase and Dividend Update
The company rewarded shareholders with share buybacks to the tune of $568 million and common dividends worth $126 million during the second quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 7.99% due to these changes.
VGM Scores
Currently, The Hartford has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise The Hartford has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.