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

Excellent balance sheet 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


Market Performance


7 Day Return

0.9%

NYSE:THG

1.2%

US Insurance

-0.02%

US Market


1 Year Return

13.4%

NYSE:THG

9.2%

US Insurance

1.6%

US Market

THG outperformed the Insurance industry which returned 9.2% over the past year.

THG outperformed the Market in United States of America which returned 1.6% over the past year.


Share holder returns

THGIndustryMarket
7 Day0.9%1.2%-0.02%
30 Day-0.3%2.5%2.7%
90 Day3.5%1.2%1.4%
1 Year20.7%13.4%11.8%9.2%3.8%1.6%
3 Year93.5%74.4%46.5%35.3%45.2%35.8%
5 Year150.0%115.4%71.5%50.9%61.8%44.1%

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 based on future cash flows and its price relative to the stock market?

17.51x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Hanover Insurance Group's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Hanover Insurance Group's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Hanover Insurance Group is overvalued based on earnings compared to the US Insurance industry average.

Hanover Insurance Group is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

Hanover Insurance Group is poor value based on expected growth next year.


Price Based on Value of Assets

Hanover Insurance Group is overvalued based on assets compared to the US Insurance industry average.


Next Steps

Future Growth

How is Hanover Insurance Group expected to perform in the next 1 to 3 years based on estimates from 5 analysts?

2.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Hanover Insurance Group's revenue is expected to grow by 3.8% yearly, however this is not considered high growth (20% yearly).

Hanover Insurance Group's earnings are expected to grow by 2.1% yearly, however this is not considered high growth (20% yearly).

Hanover Insurance Group's revenue growth is positive but not above the United States of America market average.

Hanover Insurance Group's earnings growth is positive but not above the United States of America market average.

Hanover Insurance Group's earnings growth is positive but not above the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Hanover Insurance Group is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


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

Hanover Insurance Group's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

Hanover Insurance Group's 1-year earnings growth exceeds its 5-year average (18.7% vs -3.1%)

Hanover Insurance Group's earnings growth has exceeded the US Insurance industry average in the past year (18.7% vs 3.1%).


Return on Equity

Hanover Insurance Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Hanover Insurance Group used its assets more efficiently than the US Insurance industry average last year based on Return on Assets.


Return on Capital Employed

Hanover Insurance Group has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Hanover Insurance Group's financial position?


Financial Position Analysis

Hanover Insurance Group's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Hanover Insurance Group's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Hanover Insurance Group's level of debt (22.2%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (32.3% vs 22.2% today).

Debt is well covered by operating cash flow (96.3%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 11x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 5x debt.


Next Steps

Dividend

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

1.93%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Hanover Insurance Group's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).

Hanover Insurance Group's dividend is below the markets top 25% of dividend payers in United States of America (3.71%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (3.2x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (3.5x coverage).


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?

2.7yrs

Average management tenure


CEO

Jack Roche (55yo)

1.8yrs

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

Jack's remuneration is lower than average for companies of similar size in United States of America.

Jack's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

2.7yrs

Average Tenure

55yo

Average Age

The tenure for the Hanover Insurance Group management team is about average.


Board Age and Tenure

3.5yrs

Average Tenure

63.5yo

Average Age

The tenure for the Hanover Insurance Group board of directors is about average.


Insider Trading

Hanover Insurance Group individual 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: 19.5yrs
    • Compensation: US$2.03m
  • Ann Tripp (60yo)

    Executive VP

    • Tenure: 13.7yrs
  • Jeff Farber (54yo)

    Executive VP & CFO

    • Tenure: 2.8yrs
    • Compensation: US$2.95m
  • Richard Lavey (51yo)

    Executive VP & President of Hanover Agency Markets

    • Tenure: 2.6yrs
    • Compensation: US$1.59m
  • John Fowle (49yo)

    CEO & Chief Underwriting Officer of Chaucer

    • Tenure: 2.6yrs
    • Compensation: US$4.37m
  • Warren Barnes (57yo)

    Senior VP

    • Tenure: 3.9yrs
  • Jack Roche (55yo)

    President

    • Tenure: 1.8yrs
    • 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: 10.3yrs
  • Mark Berthiaume (62yo)

    Executive VP & Chief Technology Innovation Officer

    • Tenure: 2.6yrs

Board Members

  • Joseph Ramrath (62yo)

    Director

    • Tenure: 15.6yrs
    • Compensation: US$245.00k
  • P. Condron (74yo)

    Non-Executive Chairman of the Board

    • Tenure: 2.3yrs
    • Compensation: US$370.00k
  • Wendell Knox (71yo)

    Director

    • Tenure: 20.7yrs
    • Compensation: US$246.00k
  • Michael Price (53yo)

    Director

    • Tenure: 2.2yrs
    • Compensation: US$266.00k
  • Tee Taggart (71yo)

    Director

    • Tenure: 10.6yrs
    • Compensation: US$256.00k
  • Dan Henry (69yo)

    Director

    • Tenure: 4.8yrs
    • Compensation: US$246.00k
  • Cynthia Egan (64yo)

    Director

    • Tenure: 4.3yrs
    • Compensation: US$260.00k
  • Jack Roche (55yo)

    President

    • Tenure: 1.8yrs
    • Compensation: US$4.17m
  • Jane Carlin (63yo)

    Director

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

    Director

    • Tenure: 1.6yrs
    • 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$5.235b
  • 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 Analysis2019/09/19 23:53
End of Day Share Price2019/09/19 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.