Should You Buy Travelers (TRV) Stock for Better Returns Now?
The Travelers Companies, Inc. TRV has been gaining momentum on the back of strong net earned premiums, high levels of retention, improved pricing, higher average levels of invested assets and sufficient liquidity.
Growth Projections
The Zacks Consensus Estimate for Travelers’ 2024 earnings is pegged at $16.46 per share, indicating a 36.7% increase from the year-ago reported figure on 10.3% higher revenues of $45.35 billion.
Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 0.08% and 0.06% north, respectively, in the past seven days. This should instill investors' confidence in the stock.
Zacks Rank & Price Performance
TRV currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 1.9% compared with the industry’s rise of 24.8%.
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Style Score
Travelers has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results have shown that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Attractive Valuation
Travelers has an impressive Value Score of A. Value stocks have a long history of showing superior returns.
Business Tailwinds
Riding on strong net earned premiums and an aggregate underlying combined ratio for Business Insurance and Bond & Specialty Insurance, strong underwriting results continued in the commercial businesses. Strong retention rates, positive renewal premium changes, higher new business premium in both Domestic Automobile and Domestic Homeowners and other across all the business segments should continue to drive Travelers.
The company’s commercial businesses continue to perform well on the back of stability in the markets where it operates as well as the execution of its strategies. In domestic homeowners and other, TRV expects renewal premium change to remain at an elevated level through the end of 2023.
Higher average levels of invested assets, reliable results from the fixed-income portfolio and strong returns from the non-fixed income portfolio are likely to drive net investment income higher.
TRV aims to generate increased earnings and capital, maintain a balanced approach to rightsizing capital and growing book value per share over time as part of its long-term financial strategy. Balance sheet strength driven by scale, profitability and cash flow supports it to invest more than $1 billion annually on technology.
The property & casualty insurer has an impressive dividend history, increasing its dividend for the last 18 years. Its current dividend yield of 2.4% is better than the industry average of 0.3%. This makes TRV an attractive pick for yield-seeking investors.
Other Stocks to Consider
Some other top ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. ACGL, Kinsale Capital Group, Inc. KNSL and Cincinnati Financial Corporation CINF, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a decent history of delivering earnings surprises in the last four quarters, the average being 26.83%. In the past year, ACGL has rallied 79.7%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings has moved 0.7% and 1.4% north, respectively, in the past seven days, reflecting analysts’ optimism.
Kinsale Capital beat estimates in each of the last four quarters, the average being 14.88%. In the past year, KNSL has soared 61.1%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings has moved 0.6% and 1% north, respectively, in the past seven days, reflecting analysts’ optimism.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 25.25%. In the past year, CINF has gained 4.4%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.
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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
