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:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Hanover Insurance Group Inc. To summarize, we found that Hanover Insurance Group Inc ranked in the 59th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 69.17% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for THG, they are:
The company's balance sheet shows it gets 86% of its capital from equity, and 14% of its capital from debt. Notably, its equity weight is greater than 74.12% of US equities in the Financial Services sector yielding a positive free cash flow.
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 28.41% 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 78.53% 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
For other companies in the Financial Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as THG, try MKL, MMAC, AFL, CB, and CRD.A.
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 …
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