Interested In The Travelers Companies, Inc. (NYSE:TRV)? Here’s What Its Recent Performance Looks Like

For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine The Travelers Companies, Inc.’s (NYSE:TRV) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.

See our latest analysis for Travelers Companies

Did TRV beat its long-term earnings growth trend and its industry?

TRV’s trailing twelve-month earnings (from 31 December 2018) of US$2.5b has jumped 23% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -12%, indicating the rate at which TRV is growing has accelerated. What’s enabled this growth? Well, let’s take a look at if it is solely owing to industry tailwinds, or if Travelers Companies has seen some company-specific growth.

NYSE:TRV Income Statement, March 12th 2019
NYSE:TRV Income Statement, March 12th 2019

In terms of returns from investment, Travelers Companies has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 2.7% exceeds the US Insurance industry of 2.2%, indicating Travelers Companies has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Travelers Companies’s debt level, has declined over the past 3 years from 13% to 8.7%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 26% to 29% over the past 5 years.

What does this mean?

Though Travelers Companies’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn’t always indicative of a continued optimistic outlook. I suggest you continue to research Travelers Companies to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for TRV’s future growth? Take a look at our free research report of analyst consensus for TRV’s outlook.
  2. Financial Health: Are TRV’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.