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

Fundamentals

Established dividend payer with proven track record.


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


Market Performance


7 Day Return

-1.8%

THG

-1.2%

US Insurance

0.07%

US Market


1 Year Return

21.8%

THG

15.3%

US Insurance

8.9%

US Market

Return vs Industry: THG exceeded the US Insurance industry which returned 15.3% over the past year.

Return vs Market: THG exceeded the US Market which returned 8.9% over the past year.


Shareholder returns

THGIndustryMarket
7 Day-1.8%-1.2%0.07%
30 Day0.03%-2.8%-0.3%
90 Day2.8%-3.7%-1.6%
1 Year29.6%21.8%18.2%15.3%11.3%8.9%
3 Year92.3%73.3%44.2%33.1%46.3%36.8%
5 Year139.3%106.2%66.2%46.3%62.1%44.3%

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?

17.6x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: THG ($133.04) is trading above our estimate of fair value ($84.39)

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


Price To Earnings Ratio

PE vs Industry: THG is poor value based on its PE Ratio (17.6x) compared to the Insurance industry average (15.8x).

PE vs Market: THG is poor value based on its PE Ratio (17.6x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: THG is poor value based on its PEG Ratio (6.5x)


Price to Book Ratio

PB vs Industry: THG is overvalued based on its PB Ratio (1.8x) compared to the US Insurance industry average (1.2x).


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?

2.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: THG's forecast earnings growth (2.7% per year) is below the savings rate (2.7%).

Earnings vs Market: THG's earnings (2.7% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: THG's earnings are forecast to grow, but not significantly.

Revenue vs Market: THG's revenue (4.3% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: THG's revenue (4.3% 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 (11.7%).


Next Steps

Past Performance

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

-3.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: THG's earnings have declined by -3.1% per year over the past 5 years.

Accelerating Growth: THG's earnings growth over the past year (18.7%) exceeds its 5-year average (-3.1% per year).

Earnings vs Industry: THG earnings growth over the past year (18.7%) exceeded the Insurance industry 2%.


Return on Equity

High ROE: THG's Return on Equity (10.7%) is considered low.


Return on Assets

ROA vs Industry: THG has a higher Return on Assets than the Insurance industry average last year.


Return on Capital Employed

ROCE Improving: THG has improved its Return on Capital Employed over the past 3 years.


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 5x 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?

1.80%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.4%markettop25%3.7%industryaverage2.4%forecastin3Years1.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: THG's dividend (1.8%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: THG's dividend (1.8%) is low compared to the top 25% of dividend payers in the US market (3.68%).

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 reasonably low payout ratio (31%), 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 (28.5% payout ratio).


Next Steps

Management

What is the CEO of Hanover Insurance Group's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Jack Roche (55yo)

1.9yrs

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 has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the US market.

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


Management Age and Tenure

2.8yrs

Average Tenure

55yo

Average Age

Experienced Management: THG's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

3.6yrs

Average Tenure

63.5yo

Average Age

Experienced Board: THG's board of directors are considered experienced (3.6 years average tenure).


Insider Trading

Insider Buying: THG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$979,52908 Aug 19
J. Huber
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares7,510
Max PriceUS$130.43
SellUS$255,37211 Feb 19
Mark Welzenbach
EntityIndividual
Shares2,216
Max PriceUS$115.24
SellUS$836,76605 Feb 19
Mark Welzenbach
EntityIndividual
Shares7,402
Max PriceUS$113.05

Ownership Breakdown


Management Team

  • J. Huber (64yo)

    Executive VP

    • Tenure: 19.6yrs
    • Compensation: US$2.03m
  • Ann Tripp (60yo)

    Executive VP

    • Tenure: 13.8yrs
  • Jeff Farber (54yo)

    Executive VP & CFO

    • Tenure: 2.9yrs
    • Compensation: US$2.95m
  • Richard Lavey (51yo)

    Executive VP & President of Hanover Agency Markets

    • Tenure: 2.7yrs
    • Compensation: US$1.59m
  • John Fowle (49yo)

    CEO & Chief Underwriting Officer of Chaucer

    • Tenure: 2.7yrs
    • Compensation: US$4.37m
  • Warren Barnes (57yo)

    Senior VP

    • Tenure: 4yrs
  • Jack Roche (55yo)

    President

    • Tenure: 1.9yrs
    • Compensation: US$4.17m
  • Bryan Salvatore (54yo)

    Executive VP & President of Specialty

    • Tenure: 2.3yrs
    • Compensation: US$1.45m
  • JR Reilly

    Vice President of Corporate Finance

    • Tenure: 10.4yrs
  • Mark Berthiaume (62yo)

    Executive VP & Chief Technology Innovation Officer

    • Tenure: 2.7yrs

Board Members

  • Joseph Ramrath (62yo)

    Independent Director

    • Tenure: 15.7yrs
    • Compensation: US$245.00k
  • P. Condron (74yo)

    Non-Executive Chairman of the Board

    • Tenure: 2.4yrs
    • Compensation: US$370.00k
  • Wendell Knox (71yo)

    Independent Director

    • Tenure: 20.8yrs
    • Compensation: US$246.00k
  • Michael Price (53yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$266.00k
  • Tee Taggart (71yo)

    Independent Director

    • Tenure: 10.7yrs
    • Compensation: US$256.00k
  • Dan Henry (69yo)

    Independent Director

    • Tenure: 4.9yrs
    • Compensation: US$246.00k
  • Cynthia Egan (64yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: US$260.00k
  • Jack Roche (55yo)

    President

    • Tenure: 1.9yrs
    • Compensation: US$4.17m
  • Jane Carlin (63yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$245.00k
  • Kevin Bradicich (62yo)

    Director

    • Tenure: 1.7yrs
    • Compensation: US$245.00k

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$5.262b
  • Shares outstanding: 39.55m
  • 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  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 23:50
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.