NYSE:THG

Stock Analysis Report

Hanover Insurance Group

Executive Summary

The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States.


Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has Hanover Insurance Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: THG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.3%

THG

-6.2%

US Insurance

-7.4%

US Market


1 Year Return

9.5%

THG

10.2%

US Insurance

10.5%

US Market

Return vs Industry: THG matched the US Insurance industry which returned 10.2% over the past year.

Return vs Market: THG matched the US Market which returned 10.5% over the past year.


Shareholder returns

THGIndustryMarket
7 Day-5.3%-6.2%-7.4%
30 Day-4.9%-1.6%-3.6%
90 Day-4.9%-1.5%-0.6%
1 Year13.7%9.5%12.9%10.2%12.8%10.5%
3 Year61.8%43.3%25.5%15.8%37.4%28.6%
5 Year120.4%86.7%63.3%43.7%61.3%43.6%

Price Volatility Vs. Market

How volatile is Hanover Insurance Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Hanover Insurance Group undervalued compared to its fair value and its price relative to the market?

12.33x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: THG ($130.29) is trading above our estimate of fair value ($123.39)

Significantly Below Fair Value: THG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: THG is good value based on its PE Ratio (12.3x) compared to the Insurance industry average (12.5x).

PE vs Market: THG is good value based on its PE Ratio (12.3x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: THG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: THG is overvalued based on its PB Ratio (1.7x) compared to the US Insurance industry average (1.1x).


Next Steps

Future Growth

How is Hanover Insurance Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-10.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: THG's earnings are forecast to decline over the next 3 years (-10.8% per year).

Earnings vs Market: THG's earnings are forecast to decline over the next 3 years (-10.8% per year).

High Growth Earnings: THG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: THG's revenue (2.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: THG's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: THG's Return on Equity is forecast to be low in 3 years time (11.3%).


Next Steps

Past Performance

How has Hanover Insurance Group performed over the past 5 years?

2.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: THG has high quality earnings.

Growing Profit Margin: THG's current net profit margins (8.8%) are higher than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: THG's earnings have grown by 2.2% per year over the past 5 years.

Accelerating Growth: THG's earnings growth over the past year (79.5%) exceeds its 5-year average (2.2% per year).

Earnings vs Industry: THG earnings growth over the past year (79.5%) exceeded the Insurance industry 34.8%.


Return on Equity

High ROE: THG's Return on Equity (14.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hanover Insurance Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: THG has a low level of unsold assets or inventory.

Debt Coverage by Assets: THG's debt is covered by short term assets (assets are 5.3x debt).


Financial Institutions Analysis

Asset Level: THG's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if THG has a sufficient allowance for bad loans.

Low Risk Liabilities: THG reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if THG has an acceptable proportion of non-loan assets held.

Low Risk Deposits: THG has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if THG has an appropriate level of bad loans.


Next Steps

Dividend

What is Hanover Insurance Group's current dividend yield, its reliability and sustainability?

2.00%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.5%markettop25%3.9%industryaverage2.4%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: THG's dividend (2%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: THG's dividend (2%) is low compared to the top 25% of dividend payers in the US market (3.9%).


Stability and Growth of Payments

Stable Dividend: THG's dividends per share have been stable in the past 10 years.

Growing Dividend: THG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.2%), THG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: THG's dividends in 3 years are forecast to be well covered by earnings (30.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.1yrs

Average management tenure


CEO

Jack Roche (55yo)

2.3yrs

Tenure

US$4,168,271

Compensation

Mr. John Conner Roche, also known as Jack, has been President and Chief Executive Officer at Hanover Insurance Group Inc. since November 2017 and serves as its Director. Mr. Roche has been President of Com ...


CEO Compensation Analysis

Compensation vs Market: Jack's total compensation ($USD4.17M) is below average for companies of similar size in the US market ($USD6.41M).

Compensation vs Earnings: Jack's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Roche
President2.3yrsUS$4.17m0.090% $4.6m
Jeffrey Farber
Executive VP & CFO3.3yrsUS$2.95m0.021% $1.1m
J. Huber
Executive VP19.9yrsUS$2.03m0.074% $3.8m
Richard Lavey
Executive VP & President of Hanover Agency Markets3yrsUS$1.59m0.041% $2.1m
Bryan Salvatore
Executive VP & President of Specialty2.7yrsUS$1.45m0.013% $662.1k
John Fowle
CEO & Chief Underwriting Officer of Chaucer3yrsUS$4.37m0.0044% $226.5k
Ann Tripp
Executive VP14.1yrsno data0.044% $2.3m
Warren Barnes
Senior VP4.3yrsno data0.011% $585.7k
John Reilly
Vice President of Corporate Finance10.8yrsno datano data
Mark Berthiaume
Executive VP & Chief Technology Innovation Officer3yrsno data0.010% $528.4k

3.1yrs

Average Tenure

55yo

Average Age

Experienced Management: THG's management team is considered experienced (3.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Roche
President2.3yrsUS$4.17m0.090% $4.6m
Joseph Ramrath
Independent Director16yrsUS$245.00k0.068% $3.5m
P. Condron
Non-Executive Chairman of the Board2.8yrsUS$370.00k0.063% $3.2m
Wendell Knox
Independent Director21.1yrsUS$246.00k0.072% $3.7m
Michael Price
Independent Director2.6yrsUS$266.00k0.0090% $465.5k
Harriett Taggart
Independent Director11yrsUS$256.00k0.031% $1.6m
Daniel Henry
Independent Director5.3yrsUS$246.00k0.034% $1.7m
Cynthia Egan
Vice Chair0yrsUS$260.00k0.018% $938.1k
Jane Carlin
Independent Director3.2yrsUS$245.00k0.012% $597.0k
Kevin Bradicich
Independent Director2yrsUS$245.00k0.0065% $334.9k

3.2yrs

Average Tenure

63.5yo

Average Age

Experienced Board: THG's board of directors are considered experienced (3.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Hanover Insurance Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Hanover Insurance Group, Inc.
  • Ticker: THG
  • Exchange: NYSE
  • Founded: 1852
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$5.160b
  • Shares outstanding: 38.45m
  • Website: https://www.hanover.com

Number of Employees


Location

  • The Hanover Insurance Group, Inc.
  • 440 Lincoln Street
  • Worcester
  • Massachusetts
  • 1653
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
THGNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1995
AF4DB (Deutsche Boerse AG)YesCommon StockDEEUROct 1995
THGI34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REP 0.5 COM USD0.01BRBRLMay 2019

Biography

The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States. The company operates in three segments: Commercial Lines, Personal Lines, and Other. The Commercial Lines segment offers commercial multiple peril, commercial automobile, workers’ compensation, umbrella, healthcare, mono-line general liability, and miscellaneous commercial property insurance products; and other commercial coverages, including inland marine, specialty program business, management and professional liability, surety, and specialty property. The Personal Lines segment provides personal automobile and homeowner’s coverages, as well as other personal coverages, such as personal inland marine, umbrella, fire, personal watercraft, earthquake, and other miscellaneous coverages. The Other segment offers investment management and advisory services to institutions, pension funds, and other organizations. The company markets its products and services through independent agents and brokers. The Hanover Insurance Group, Inc. was founded in 1852 and is headquartered in Worcester, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 00:55
End of Day Share Price2020/02/25 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.