On Nov 14, 2016, shares of The Hartford Financial Services Group, Inc. (HIG - Free Report) hit a 52-week high of $48.03. About 4.3 million shares exchanged hands in the last trading session and the stock finally closed at $47.93, down 0.21%.
The stock price appreciation was fueled by the company’s robust quarterly earnings of $1.06 per share that surpassed the Zacks Consensus Estimate by 11.6%. The bottom line also improved 23% year over year on robust revenue growth.
Revenues grew 13% year over year to $4.7 billion in the quarter, primarily driven by solid performance of commercial lines and Group benefits segment. Higher net investment income and property and casualty (P&C) underwriting results led to the top-line improvement.
The company has been relentlessly taking up initiatives to improve its risk profile. We note that the efforts have been paying off over the last few years and the third quarter was no exception. Strategic divestures have helped the company free up capital to be invested in suitable channels to generate substantial return. Numerous acquisitions have also helped the company strengthen its revenue base along with enhancing its business lines.
Investors were also impressed by The Hartford’s continuous growth in underwriting capabilities. Sustained earnings growth over the years, positive credit trends and commendable capital and liquidity position backed by distribution effectiveness and diversified product portfolio helped the company to strengthen its foothold in the P&C market.
The Hartford’s prudent capital management strategies also raise optimism. Frequent share repurchases and dividend payments by the company at regular intervals have cemented investors’ confidence on the stock. Recently, in Oct 2016, the Hartford’s board approved a 10% increase in its divided payout and authorized a new $1.3 billion equity repurchase plan for common shares. This is in addition to The Hartford’s current $4.4 billion equity repurchase plan, which is scheduled to expire on Dec 31, 2016.
HARTFORD FIN SV Price and Consensus
Zacks Rank and Stocks to Consider
The Hartford presently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors may also consider other P&C players like Chubb Ltd. (CB - Free Report) , CNA Financial Corporation (CNA - Free Report) and Everest Re Group Ltd. (RE - Free Report) . All of these stocks carry a Zacks Rank #2 (Buy).
CNA Financial delivered positive surprises in three of the last four quarters but with an average miss of 18.69%.
Chubb beat expectations in three of the last four quarters with an average beat of 4.06%
Everest Re delivered positive surprises in three of the last four quarters with an average beat of 25.64%.
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