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Reasons Why Investors Should Retain Travelers (TRV) Stock
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The Travelers Companies, Inc. (TRV - Free Report) remains well poised for growth on the back of positive renewal premium changes and new business premiums, effective capital deployment and sufficient liquidity.
Earnings Surprise History
Travelers has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 26.82%.
Zacks Rank & Price Performance
Travelers currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 0.5% compared with the industry’s decrease of 10.2%.
Image Source: Zacks Investment Research
Style Score
Travelers has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
Return on Equity (ROE)
Travelers’s ROE for the trailing 12 months is 13.6%, up 90 basis points year over year, reflecting efficiency in utilizing shareholders’ fund.
Business Tailwinds
The property and casualty insurer remains well poised for growth on the back of solid performance across its Business Insurance, Personal Insurance and Bond & Specialty Insurance segments. Strong retention rates, positive renewal premium changes and new business premiums are expected to drive the performance of the segments.
Significant investments in strategic initiatives, along with the combination of a strategic focus on expense discipline and strong top-line growth, are likely to improve the expense ratio.
As interest rates moved higher during the second quarter, Travelers raised the outlook for fixed income NII, including earnings from short-term securities, to around $470 million after tax for the third quarter and then to $495 million for the fourth quarter. Higher average levels of invested assets, favorable results from the fixed-income portfolio and solid returns from the non-fixed income portfolio are likely to drive the metric higher.
Travelers maintains a conservative balance sheet among its peers. The debt-to-capital ratio excluding after-tax net unrealized investment gains (losses) included in shareholders’ equity was 21.5%, within the company’s target range of 15% to 25%. It has been consistently increasing its book value for the past 10 years. TRV intends to generate increased earnings and capital, in excess of growth needs.
Travelers has an impressive dividend history, increasing its dividend for the last 18 years. Its current dividend yield of 2.4% is better than the industry average of 0.4%. This makes TRV an attractive pick for yield-seeking investors. TRV has around $3 billion of capacity remaining under the share repurchase authorization from the board.
The Zacks Consensus Estimate for Travelers’ 2023 earnings per share is pegged at $14.68, indicating a year-over-year increase of 7.8%.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. In the past year, the insurer has rallied 15.4%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 9.2% and 7.2% north, respectively, in the past 60 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has lost 7.7%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 4% and 4.3% north, respectively, in the past 60 days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 14.4%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 60 days.
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Reasons Why Investors Should Retain Travelers (TRV) Stock
The Travelers Companies, Inc. (TRV - Free Report) remains well poised for growth on the back of positive renewal premium changes and new business premiums, effective capital deployment and sufficient liquidity.
Earnings Surprise History
Travelers has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 26.82%.
Zacks Rank & Price Performance
Travelers currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 0.5% compared with the industry’s decrease of 10.2%.
Image Source: Zacks Investment Research
Style Score
Travelers has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
Return on Equity (ROE)
Travelers’s ROE for the trailing 12 months is 13.6%, up 90 basis points year over year, reflecting efficiency in utilizing shareholders’ fund.
Business Tailwinds
The property and casualty insurer remains well poised for growth on the back of solid performance across its Business Insurance, Personal Insurance and Bond & Specialty Insurance segments. Strong retention rates, positive renewal premium changes and new business premiums are expected to drive the performance of the segments.
Significant investments in strategic initiatives, along with the combination of a strategic focus on expense discipline and strong top-line growth, are likely to improve the expense ratio.
As interest rates moved higher during the second quarter, Travelers raised the outlook for fixed income NII, including earnings from short-term securities, to around $470 million after tax for the third quarter and then to $495 million for the fourth quarter. Higher average levels of invested assets, favorable results from the fixed-income portfolio and solid returns from the non-fixed income portfolio are likely to drive the metric higher.
Travelers maintains a conservative balance sheet among its peers. The debt-to-capital ratio excluding after-tax net unrealized investment gains (losses) included in shareholders’ equity was 21.5%, within the company’s target range of 15% to 25%. It has been consistently increasing its book value for the past 10 years. TRV intends to generate increased earnings and capital, in excess of growth needs.
Travelers has an impressive dividend history, increasing its dividend for the last 18 years. Its current dividend yield of 2.4% is better than the industry average of 0.4%. This makes TRV an attractive pick for yield-seeking investors. TRV has around $3 billion of capacity remaining under the share repurchase authorization from the board.
The Zacks Consensus Estimate for Travelers’ 2023 earnings per share is pegged at $14.68, indicating a year-over-year increase of 7.8%.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , American Financial Group, Inc. (AFG - Free Report) and ProAssurance Corporation (PRA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. In the past year, the insurer has rallied 15.4%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 9.2% and 7.2% north, respectively, in the past 60 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has lost 7.7%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 4% and 4.3% north, respectively, in the past 60 days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 14.4%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 60 days.