Shares of The Hartford Financial Services Group (HIG) have been strong performers lately, with the stock up 4.5% over the past month. The stock hit a new 52-week high of $61.63 in the previous session. The Hartford Financial Services Group has gained 37.2% since the start of the year compared to the 17.8% move for the Zacks Finance sector and the 17.6% return for the Zacks Insurance - Multi line industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 4, 2019, The Hartford reported EPS of $1.5 versus consensus estimate of $1.26.
The Hartford may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
The Hartford has a Value Score of A. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 11.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 10.5X versus its peer group's average of 10.1X. Additionally, the stock has a PEG ratio of 1.17. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, The Hartford currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if The Hartford fits the bill. Thus, it seems as though The Hartford shares could still be poised for more gains ahead.
How Does The Hartford Stack Up to the Competition?
Shares of The Hartford have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also impressive, including Radian Group (RDN), Axa Sa (AXAHY), and Kemper (KMPR), all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for The Hartford. Still, the fundamentals for The Hartford are promising, and it still has potential despite being at a 52-week high.
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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report
Radian Group Inc. (RDN) : Free Stock Analysis Report
Kemper Corporation (KMPR) : Free Stock Analysis Report
Axa Sa (AXAHY) : Free Stock Analysis Report
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