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Should You Retain Travelers (TRV) Stock in Your Portfolio?
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The Travelers Companies, Inc. (TRV - Free Report) remains well-poised for growth on the back of higher average levels of invested assets, strong returns from the non-fixed income portfolio, positive renewal premium change and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for 2023 earnings per share is pegged at $14.69, indicating year-over-year increase of 11.2%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 has moved 0.5% north in the past 60 days, reflecting analysts’ optimism.
Earnings Surprise History
Travelers has a decent earnings surprise history. It beat estimates in each of the last six quarters.
Zacks Rank & Price Performance
Travelers currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 17.7%, outperforming the industry’s increase of 1.3%.
Image Source: Zacks Investment Research
Style Score
Travelers has a favorable VGM Score of A. 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 14.3%, up 220 basis points year over year, reflecting efficiency in utilizing shareholders’ fund. TRV targets mid-teens ROE over the long term.
Business Tailwinds
Riding on strong net earned premiums and an aggregate underlying combined ratio for Business Insurance and Bond & Specialty Insurance, strong underwriting results continued in the commercial businesses. High levels of retention, improved pricing, an increase in new business and a positive renewal premium change should continue to drive Travelers.
TRV expects domestic automobile renewal premium change to be in double digits in the fourth quarter and be in the mid-teens throughout 2023.
Travelers projected nearly $540 million on average per quarter in 2023 with an estimated $515 million in the first quarter. Higher average levels of invested assets, reliable results from the fixed-income portfolio and strong returns from the non-fixed-income portfolio are likely to drive the metric higher.
The property and casualty insurer maintains a conservative balance sheet among its peers. The debt-to-capital ratio (excluding after-tax net unrealized investment gains included in shareholders’ equity) was within the insurer’s target range of 15% to 25%.
Travelers has an impressive dividend history, increasing its dividend for the last 18 years. Its current dividend yield of 1.9% is better than the industry average of 0.3%. This makes TRV an attractive pick for yield-seeking investors.
TRV also has an impressive Value Score of A. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best opportunities in the value investing space.
Image: Bigstock
Should You Retain Travelers (TRV) Stock in Your Portfolio?
The Travelers Companies, Inc. (TRV - Free Report) remains well-poised for growth on the back of higher average levels of invested assets, strong returns from the non-fixed income portfolio, positive renewal premium change and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for 2023 earnings per share is pegged at $14.69, indicating year-over-year increase of 11.2%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 has moved 0.5% north in the past 60 days, reflecting analysts’ optimism.
Earnings Surprise History
Travelers has a decent earnings surprise history. It beat estimates in each of the last six quarters.
Zacks Rank & Price Performance
Travelers currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 17.7%, outperforming the industry’s increase of 1.3%.
Image Source: Zacks Investment Research
Style Score
Travelers has a favorable VGM Score of A. 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 14.3%, up 220 basis points year over year, reflecting efficiency in utilizing shareholders’ fund. TRV targets mid-teens ROE over the long term.
Business Tailwinds
Riding on strong net earned premiums and an aggregate underlying combined ratio for Business Insurance and Bond & Specialty Insurance, strong underwriting results continued in the commercial businesses. High levels of retention, improved pricing, an increase in new business and a positive renewal premium change should continue to drive Travelers.
TRV expects domestic automobile renewal premium change to be in double digits in the fourth quarter and be in the mid-teens throughout 2023.
Travelers projected nearly $540 million on average per quarter in 2023 with an estimated $515 million in the first quarter. Higher average levels of invested assets, reliable results from the fixed-income portfolio and strong returns from the non-fixed-income portfolio are likely to drive the metric higher.
The property and casualty insurer maintains a conservative balance sheet among its peers. The debt-to-capital ratio (excluding after-tax net unrealized investment gains included in shareholders’ equity) was within the insurer’s target range of 15% to 25%.
Travelers has an impressive dividend history, increasing its dividend for the last 18 years. Its current dividend yield of 1.9% is better than the industry average of 0.3%. This makes TRV an attractive pick for yield-seeking investors.
TRV also has an impressive Value Score of A. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best opportunities in the value investing space.
Stocks to Consider
Some top-ranked stocks from the property and casualty insurance industry are Root, Inc. (ROOT - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and First American Financial Corporation (FAF - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 89.2%.
The Zacks Consensus Estimate for ROOT’s 2023 earnings indicates a year-over-year increase of 23.9%.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average being 15.16%. In the past year, KNSL has gained 40.3%.
The Zacks Consensus Estimate for KNSL’s 2023 earnings implies a year-over-year rise of 22.6%.
First American has a solid track record of beating earnings estimates in each of the last six quarters. In the past year, FAF has lost 26.3%.
The Zacks Consensus Estimate for FAF’s 2023 earnings has moved 3.9% north in the past 60 days.