We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Retain Travelers (TRV) Stock in Your Portfolio?
Read MoreHide Full Article
The Travelers Companies, Inc.’s (TRV - Free Report) strong net earned premiums, high levels of retention, improved pricing, higher average levels of invested assets and sufficient liquidity make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for Travelers’ 2024 earnings is pegged at $16.41, indicating a 36.6% increase from the year-ago reported figure on 10.2% higher revenues of $45.29 billion.
Zacks Rank & Price Performance
Travelers currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 0.9% against the industry’s increase of 16.4%.
Image Source: Zacks Investment Research
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.
Travelers’ commercial businesses continue to perform well on the back of stability in the markets where it operates as well as the execution of its strategies. For 2023, the insurer expects renewal premium change to be modestly at a higher level throughout the remainder of 2023. In domestic homeowners and other, TRV expects renewal premium change to remain at an elevated level through the end of the year.
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. Given improved rate environment, Travelers raised outlook for fixed income NII, including earnings from short-term securities by $35 million for the second half of the year, to an estimated $570 million in the third quarter and then to around $590 million in the fourth quarter.
TRV maintains a conservative balance sheet among its peers. TRV aims to generate increased earnings and capital, maintain a balanced approach to rightsizing capital and growing book value per share over time as part of its long-term financial strategy. Balance sheet strength driven by scale, profitability and cash flow support it to invest more than $1 billion annually on technology.
The property & casualty insurer returned $633 million of capital to shareholders in the second quarter, consisting share repurchases of $400 million and dividends of $233 million.
Travelers has an impressive dividend history, increasing its dividend for the last 18 years. Its current dividend yield of 2.3% is better than the industry average of 0.3%. This makes TRV an attractive pick for yield-seeking investors.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.88%. In the past year, KNSL has gained 33.6%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $11.16 and $13.64, indicating a year-over-year increase of 43% and 22.1%, respectively.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 67.5%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 2.5%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should You Retain Travelers (TRV) Stock in Your Portfolio?
The Travelers Companies, Inc.’s (TRV - Free Report) strong net earned premiums, high levels of retention, improved pricing, higher average levels of invested assets and sufficient liquidity make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for Travelers’ 2024 earnings is pegged at $16.41, indicating a 36.6% increase from the year-ago reported figure on 10.2% higher revenues of $45.29 billion.
Zacks Rank & Price Performance
Travelers currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 0.9% against the industry’s increase of 16.4%.
Image Source: Zacks Investment Research
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.
Travelers’ commercial businesses continue to perform well on the back of stability in the markets where it operates as well as the execution of its strategies. For 2023, the insurer expects renewal premium change to be modestly at a higher level throughout the remainder of 2023. In domestic homeowners and other, TRV expects renewal premium change to remain at an elevated level through the end of the year.
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. Given improved rate environment, Travelers raised outlook for fixed income NII, including earnings from short-term securities by $35 million for the second half of the year, to an estimated $570 million in the third quarter and then to around $590 million in the fourth quarter.
TRV maintains a conservative balance sheet among its peers. TRV aims to generate increased earnings and capital, maintain a balanced approach to rightsizing capital and growing book value per share over time as part of its long-term financial strategy. Balance sheet strength driven by scale, profitability and cash flow support it to invest more than $1 billion annually on technology.
The property & casualty insurer returned $633 million of capital to shareholders in the second quarter, consisting share repurchases of $400 million and dividends of $233 million.
Travelers has an impressive dividend history, increasing its dividend for the last 18 years. Its current dividend yield of 2.3% is better than the industry average of 0.3%. This makes TRV an attractive pick for yield-seeking investors.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Kinsale Capital Group, Inc. (KNSL - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and Axis Capital Holdings Limited (AXS - 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.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.88%. In the past year, KNSL has gained 33.6%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $11.16 and $13.64, indicating a year-over-year increase of 43% and 22.1%, respectively.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 67.5%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 2.5%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.