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Hartford Financial Services (HIG)
:HIG
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Hartford Financial
(NYSE:HIG)79Outperform
Positive Factors
Financial Performance
Hartford's earnings levels are largely sustainable and less volatile than peers, providing a more consistent performance.
Underwriting and Pricing
Strong underwriting improvements in personal lines were driven by pricing and better frequency in both auto and home.
Negative Factors
Reserving Concerns
There is an ongoing debate about how the commercial segment reserving will develop, with concerns about general liability reserve charges.
Hartford Financial (HIG) vs. S&P 500 (SPY)
Market Cap
$33.38B
Dividend Yield1.61%
Average Volume (3M)1.87M
Price to Earnings (P/E)11.3
Beta (1Y)0.62
Revenue Growth8.19%
EPS Growth29.77%
CountryUS
Employees18,700
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)10.36
Shares Outstanding285,387,000
10 Day Avg. Volume2,090,014
30 Day Avg. Volume1,873,600
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)N/A
Price to Sales (P/S)1.29
Price to Cash Flow (P/CF)4.60
P/FCF Ratio4.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$129.75Price Target Upside10.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Hartford Financial Business Overview & Revenue Model
Company DescriptionHartford Financial Services Group, Inc., commonly known as Hartford Financial, is a prominent insurance and investment company based in the United States. The company operates across several sectors, including property and casualty insurance, group benefits, and mutual funds. Hartford Financial provides a diverse range of products and services aimed at both individual and business clients, offering solutions such as auto, home, and business insurance, as well as employee benefits and retirement planning services.
How the Company Makes MoneyHartford Financial makes money primarily through its insurance operations, which include property and casualty insurance and group benefits. Revenue is generated from the premiums paid by policyholders for various insurance products, such as auto, home, and commercial insurance. The company also earns income from its investment management services, where it manages assets and mutual funds for individuals and institutions, collecting fees based on the assets under management. Significant partnerships with brokers and financial advisors help in distributing its products and expanding its client base. Additionally, Hartford Financial leverages its underwriting expertise to assess and manage risk efficiently, contributing to its profitability.
Hartford Financial Financial Statement Overview
Summary
Hartford Financial exhibits solid financial performance with strong revenue growth, improved profit margins, and effective cash flow management. The balance sheet remains healthy, though a slight increase in liabilities warrants attention. Overall, the company's financial health is strong, positioning it well in the insurance industry.Income Statement
Hartford Financial has demonstrated strong revenue growth, with a revenue increase of 8.2% from 2023 to 2024. The net profit margin improved to 11.73% in 2024, up from 10.21% in 2023. However, the lack of EBIT and EBITDA data for 2024 impedes a full profitability assessment. Overall, consistent revenue growth and improved profitability are positive indicators.85
Very Positive
Balance Sheet
The company maintains a stable balance sheet with a debt-to-equity ratio of 0.27 in 2024, indicating moderate leverage. The return on equity (ROE) improved to 18.91% in 2024 from 16.34% in 2023, reflecting effective use of equity. However, the equity ratio decreased slightly to 20.32% in 2024, highlighting a slight increase in liabilities relative to assets.78
Positive
Cash Flow
Hartford Financial's free cash flow grew by 43.9% from 2023 to 2024, showcasing strong cash generation capabilities. The operating cash flow to net income ratio is robust at 1.90 in 2024, indicating efficient cash conversion. However, the free cash flow to net income ratio is slightly lower at 1.85, suggesting room for improvement in cash retention.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 26.54B | 24.53B | 22.36B | 22.39B | 20.52B | Gross Profit |
| 26.54B | 24.53B | 17.53B | 17.61B | 16.04B | EBIT |
| 0.00 | 3.31B | 3.02B | 2.81B | 1.99B | EBITDA |
| 0.00 | 3.80B | 3.10B | 3.81B | 2.92B | Net Income Common Stockholders |
| 3.11B | 2.50B | 1.82B | 2.37B | 1.74B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.25B | 126.00M | 40.32B | 46.75B | 48.47B | Total Assets |
| 80.92B | 76.78B | 73.02B | 76.58B | 74.11B | Total Debt |
| 4.37B | 4.36B | 4.36B | 4.94B | 4.35B | Net Debt |
| 4.18B | 4.24B | 4.13B | 4.74B | 4.20B | Total Liabilities |
| 64.47B | 54.77B | 59.39B | 4.94B | 4.35B | Stockholders Equity |
| 16.45B | 15.33B | 13.63B | 17.84B | 18.56B |
| Cash Flow | Free Cash Flow | |||
| 5.76B | 4.00B | 3.83B | 3.96B | 3.76B | Operating Cash Flow |
| 5.91B | 4.22B | 4.01B | 4.09B | 3.87B | Investing Cash Flow |
| -3.77B | -2.43B | -1.28B | -2.47B | -2.07B | Financing Cash Flow |
| -2.08B | -1.95B | -2.71B | -1.58B | -1.78B |
Hartford Financial Technical Analysis
Positive
116.98
Price Trends
111.38
Positive
113.77
Positive
109.97
Positive
Market Momentum
1.59
Negative
60.02
Neutral
81.07
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HIG, the sentiment is Positive. The current price of 116.98 is above the 20-day moving average (MA) of 113.52, above the 50-day MA of 111.38, and above the 200-day MA of 109.97, indicating a bullish trend. The MACD of 1.59 indicates Negative momentum. The RSI at 60.02 is Neutral, neither overbought nor oversold. The STOCH value of 81.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HIG.
Hartford Financial Risk Analysis
Hartford Financial disclosed 40 risk factors in its most recent earnings report. Hartford Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hartford Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $33.38B | 11.30 | 18.92% | 1.61% | 8.19% | 29.77% | |
75 Outperform | $13.77B | 8.24 | 16.23% | 2.00% | 4.03% | 45.42% | |
71 Outperform | $47.38B | 15.77 | -3.30% | 1.89% | -28.56% | 1.14% | |
67 Neutral | $6.11B | 1.95 | 39.61% | 4.75% | 47.95% | ― | |
65 Neutral | $55.56B | 13.72 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
61 Neutral | $38.79B | 14.61 | 9.78% | 4.63% | 34.25% | 11.22% |
* Financial Sector Average
Performance Comparison
HIG
Hartford Financial
116.98
22.78
24.18%
AIG
American International Group
79.85
7.48
10.34%
LNC
Lincoln National
35.88
11.03
44.39%
MET
Metlife
81.56
13.12
19.17%
PRU
Prudential Financial
109.59
5.39
5.17%
UNM
Unum Group
77.91
28.78
58.58%
Hartford Financial Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: 2.83% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The Hartford's earnings call presented a strong overall performance for 2024, with significant growth and profitability in both Commercial and Personal Lines. However, the need to strengthen general liability reserves and the impact of asbestos & environmental development highlighted some underlying challenges. Despite these, the company remains optimistic about maintaining robust margins and growth in 2025.Highlights
Strong Financial Performance
The Hartford reported a full-year core earnings ROE of 16.7%, reflecting strong underwriting execution and investment performance.
Commercial Lines Growth
Commercial Lines achieved a written premium growth of 6% for the quarter, with an underlying combined ratio of 87.1%. On a yearly basis, growth was 9% with an underlying combined ratio of 87.9%.
Personal Lines Improvement
Personal Lines reported a 17.3-point improvement in the loss ratio over the prior year, with an underlying combined ratio of 90.2% for the quarter.
Group Benefits Core Earnings Margin
Group Benefits delivered a core earnings margin of 7.8% for the quarter and 8.2% for the year, driven by strong life and disability results.
Lowlights
General Liability Reserve Strengthening
The Hartford strengthened its general liability reserves by $130 million before tax due to increased settlement costs and a higher percentage of attorney representation.
Asbestos & Environmental Development
The company reported $141 million of adverse development in Asbestos & Environmental reserves, impacting core earnings.
Expense Ratio Increase in Personal Lines
The expense ratio for Personal Lines increased by 1.9 points, driven by higher marketing costs, staffing costs, and commissions.
Company Guidance
During the Hartford Financial's fourth quarter and full-year 2024 earnings call, the company highlighted several key metrics demonstrating its strong financial performance and strategic progress. The Commercial Lines business achieved a 6% growth in the fourth quarter and 9% for the year, maintaining an underlying combined ratio of 87.1% and 87.9%, respectively. The Personal Lines segment showed a significant 9.3 point improvement in the underlying combined ratio for the quarter, driven by over 10 points in auto. The Group Benefits division reported a core earnings margin of 7.8% for the quarter and 8.2% for the year, with strong life and disability results. Additionally, the investment portfolio generated solid performance, contributing to a core earnings return on equity of 16.7% for the year. Looking forward, the company expects to sustain consistent results in 2025, driven by disciplined underwriting, strategic investments, and continued emphasis on customer-focused solutions.Hartford Financial Corporate Events
Shareholder MeetingsBusiness Operations and Strategy
Hartford Financial Rebrands to Hartford Insurance Group
Neutral
Feb 6, 2025
On February 6, 2025, The Hartford Financial Services Group, Inc. announced its rebranding to The Hartford Insurance Group, Inc., with effect from the same date. The Board of Directors approved changes to the company’s charter and bylaws, reflecting the new name and extending shareholders’ rights to call special meetings, indicating a strategic shift and new branding initiatives.
Executive/Board ChangesBusiness Operations and Strategy
Hartford Financial Appoints New President Amid Strategic Shift
Positive
Jan 10, 2025
The Hartford has appointed A. Morris Tooker as its new president, effective February 1, 2025. Tooker, previously head of the company’s Commercial Lines, will now oversee all property-and-casualty businesses, including Personal Lines, and will manage various enterprise-wide initiatives. This strategic appointment aligns with The Hartford’s growth-and-innovation strategy aimed at adapting to changing customer needs, marking a significant time in the company’s history with a focus on technology investments to enhance customer relationships and operational efficiency.
Executive/Board ChangesBusiness Operations and Strategy
Hartford Financial Enhances Board with New Appointment
Positive
Jan 6, 2025
The Hartford has appointed Annette Rippert to its board of directors, effective February 18, 2025. Rippert, with her extensive experience in technology, data, and artificial intelligence, is expected to enhance The Hartford’s strategic growth and innovation, particularly in expanding its market presence and technological capabilities.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.