Hanover Insurance Scales 52-week High - Analyst Blog

On Jun 13, 2014, shares of The Hanover Insurance Group Inc. HRB scaled a 52-week high of $63.40. With about 0.29 million shares exchanging hands in the last trading session, shares closed at $67.27.

The year-to-date return from the stock came in at 29.8%, which was ahead of the S&P's return of 19.0%.

With respect to earnings performance, the property and casualty insurer has delivered 11 straights quarters of positive surprise. In the last reported quarter, with operating earnings of $1.16, Hanover Insurance delivered a positive surprise of 26%. While net premiums written improved on the strength of better performance at Chaucer and Commercial Lines, Commercial and Personal Lines continues to witness price increase.

It also scores strong with the credit rating agency. A.M. Best Co. reiterated the issuer credit rating (ICR) of “bbb” Hanover Insurance. The rating agency also maintained the financial strength rating FSR of A (Excellent) and ICR of “a” of its subsidiaries. The ratings carry a stable outlook.

With respect to enhancing shareholders' value, the company has been increasing dividend over many years. Its dividend yield of 2.38% betters the industry average of 2.17%. This, in a way, helps to retain investor confidence in the stock as well as attract new investors.

Steady operational performance by Hanover Insurance helped the Zacks Consensus Estimate to move north in the last 60 days. The Zacks Consensus Estimate for 2014 is currently pegged at $4.80 for 2014, after increasing 2.8% as half of the estimates were revised higher. The same for 2015 increased 1.5% as most of the estimates moved north over the same time frame. The expected long-term growth rate for the stock is 4.8%.

Hanover Insurance carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Some better-ranked property and casualty insurers worth considering are W.R. Berkley Corporation WRB, AmTrust Financial Services, Inc. AFSI and Atlas Financial Holdings, Inc. AFH. All these stocks sport a Zacks Rank #1 (Strong Buy).
 

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