The Hanover Insurance Group, Inc. provides various property and casualty insurance products and services in the United States and internationally. It operates through four segments: Commercial Lines, Personal Lines, Chaucer, and Other. The company was founded in 1852 and is based in Worcester, Massachusetts.
THG Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Hanover Insurance Group Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Hanover Insurance Group Inc ranked in the 58th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 69.83%. The most interesting components of our discounted cash flow analysis for Hanover Insurance Group Inc ended up being:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 86. Its equity weight surpasses that of 73.72% of free cash flow generating stocks in the Financial Services sector.
THG's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 28.97% of tickers in our DCF set.
Hanover Insurance Group Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 10.54. This coverage rate is greater than that of 78.51% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
GHL, AFL, MMAC, CB, and MKL can be thought of as valuation peers to THG, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
The Hanover Insurance Group ([[THG]] -1.0%) expands its TAP Sales online quote and issuance capability to now include management liability and miscellaneous professional liability products. This will help agent partners easily quote, rate, bind and issue stand-alone specialty policies for small business clients.This expansion is part of a series of investments...
Hanover Insurance Group ([[THG]] -1.5%) introduces a new suite of coverages designed to protect homeowners who generate income through home-based businesses or short-term rentals of their properties.The new Home Business Solutions features four coverage options, which can be chosen individually:Home-based business coverage is designed for businesses located within a primary...
The Hanover Insurance Group Inc. reported net income of $115.2 million in the second quarter of 2020, compared to $74.0 million in the prior-year quarter. The insurer said it has experienced limited COVID-19-related loss activity to date, although it increased …
Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial […]