U.S. Markets closed

Travelers' Shares Hit 52-Week High

Zacks Equity Research

On Mar 20, 2013, the shares of The Travelers Companies, Inc. (TRV) hit a 52-week high of $84.10. Previously, the company generated a 500% earnings surprise in the fourth quarter of 2012. The company generated positive earning surprise in 6 out of the past 10 quarters.

Travelers reported operating earnings of 72 cents per share in the fourth quarter of 2012, which surpassed the Zacks Consensus Estimate of 4 cents. Net written premiums during the quarter were $5.4 billion, up 2% year over year.

Total revenue also increased 2% year over year to $6.5 billion, driven by the augmentation in premiums earned and net investment income. Revenues surpassed the Zacks Consensus Estimate of $6.3 billion.

Moreover, over the last 8 years, Travelers continuously registered better returns on equity (:ROE) than its peers. Further, the company’s dividend yield averaged 2.58% over the last five years, much ahead of the industry yield of 0.96%.

Travelers also has a strong balance sheet with ample statutory surplus levels. Moreover, the company is the second-largest writer of auto and homeowners’ insurance through independent agents and the sixth-largest writer of commercial U.S. property-casualty insurance.

The valuation of Travelers looks attractive. The shares are trading at a discount to peers both on price-to-book and forward price-to-earnings basis, while the return on equity of 9.6% is higher than the peer group average of 9.3%.

Travelers carries a Zacks Rank #2 (Buy). Other property & casualty insurance companies worth considering are Arch Capital Group Ltd. (ACGL), Aspen Insurance Holdings Ltd. (AHL) and Cincinnati Financial Corp. (CINF). All these companies carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on TRV

Read the Full Research Report on CINF

Read the Full Research Report on ACGL

Read the Full Research Report on AHL

Zacks Investment Research

More From Zacks.com