Hanover Insurance (THG) AI Stock Analysis

• Market Cap: $6.02B
• Dividend Yield: 2.14%
• Average Volume (3M): 236.74K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.31
• Revenue Growth: 4.47%
• EPS Growth: 102.98%
• Country: US
• Employees: 4,900
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 5.09
• Shares Outstanding: 35,770,447
• 10 Day Avg. Volume: 236,071
• 30 Day Avg. Volume: 236,740
• PEG Ratio: 0.01
• Price to Book (P/B): 1.95
• Price to Sales (P/S): 0.89
• P/FCF Ratio: 6.97
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 1.09
• Enterprise Value/Gross Profit: 4.96
• Enterprise Value/Ebitda: 9.54
• 1Y Price Target: $198.60
• Price Target Upside: 17.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 74 Outperform
• Price Target: $189.00 ▲(12.24% Upside)

Hanover Insurance's overall stock score is driven by strong financial performance and positive earnings call insights, highlighting robust growth and strategic investments. The valuation is attractive, offering potential upside. However, technical indicators suggest bearish momentum, which slightly tempers the overall score.

Positive Factors

Revenue Growth

Projected growth in net written premiums indicates strong demand for Hanover's insurance products, supporting sustained revenue expansion and market presence.

Operational Efficiency

Investments in AI and technology are likely to improve operational efficiency, reduce costs, and enhance decision-making, driving long-term profitability.

Profitability Margins

Improved profit margins reflect effective cost management, contributing to stronger profitability and financial health over the long term.

Negative Factors

Commercial Auto Challenges

Higher reserves for commercial auto indicate increased claims costs, which could pressure profitability and require strategic adjustments.

Market Competition

Intense competition in the middle market may limit growth opportunities and require strategic focus to maintain market share.

Tariff Concerns

Tariff-related cost increases could impact profitability, necessitating adjustments in pricing strategies to maintain margins.

Hanover Insurance Business Overview & Revenue Model

Company Description

The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States. The company operates through three segments: Commercial Lines, Personal Lines, and Other. The Commercial Lines segment offers commercial multiple peril, commercial automobile, and workers' compensation insurance products, as well as management and professional liability, marine, specialty industrial and commercial property, monoline general liability, surety, umbrella, fidelity, crime, and other commercial coverages. The Personal Lines segment provides personal automobile and homeowner's coverages, as well as other personal coverages, such as personal umbrella, inland marine, fire, personal watercraft, personal cyber, and other miscellaneous coverages. The Other segment markets investment management services to institutions, pension funds, and other organizations. The Hanover Insurance Group, Inc. markets its products and services through independent agents and brokers. The company was formerly known as Allmerica Financial Corp. and changed its name to The Hanover Insurance Group, Inc. in December 2005. The Hanover Insurance Group, Inc. was founded in 1852 and is headquartered in Worcester, Massachusetts.

How the Company Makes Money

Hanover Insurance generates revenue primarily through the underwriting of insurance policies. The company collects premiums from policyholders, which serve as the main source of income. Additionally, THG invests the premiums it collects in various financial instruments, generating investment income. Key revenue streams include commercial lines, personal lines, and specialty insurance products. The company also benefits from strategic partnerships with independent agents and brokers, which help expand its market reach and customer base. Furthermore, effective risk management practices and a focus on underwriting discipline contribute to profitability by minimizing claims costs.

Hanover Insurance Financial Statement Overview

Summary

Hanover Insurance exhibits solid financial performance with consistent revenue growth and improved profitability margins. The balance sheet shows a stable leverage position and strong equity returns, while cash flow metrics indicate efficient cash generation and management. The company is well-positioned in the insurance industry, with opportunities for further operational improvements.

Income Statement

Hanover Insurance has shown consistent revenue growth, with a TTM revenue growth rate of 1.84%. The gross profit margin improved to 22.03% in TTM, indicating better cost management. The net profit margin also increased to 8.70%, reflecting enhanced profitability. However, the EBIT and EBITDA margins, while improved, remain moderate at 11.50% and 11.46%, respectively, suggesting room for operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio has decreased to 0.24 in TTM, indicating a stable leverage position. Return on equity improved to 18.54%, showcasing effective use of equity to generate profits. The equity ratio stands at 20.44%, suggesting a solid equity base relative to total assets. Overall, the balance sheet reflects a stable financial position with manageable debt levels.

Cash Flow

Hanover Insurance's cash flow performance is strong, with a free cash flow growth rate of 8.70% in TTM. The operating cash flow to net income ratio is robust at 1.54, indicating efficient cash generation relative to net income. The free cash flow to net income ratio is nearly 1, demonstrating effective conversion of earnings into cash flow. The cash flow metrics highlight strong liquidity and cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.39B	6.22B	5.96B	5.43B	5.16B	4.82B
Gross Profit	1.41B	1.24B	652.90M	716.30M	1.04B	1.02B
EBITDA	732.00M	573.40M	81.50M	191.00M	572.20M	500.10M
Net Income	555.30M	426.00M	35.30M	116.00M	422.80M	358.70M
Balance Sheet
Total Assets	15.73B	15.27B	14.61B	14.00B	14.25B	13.44B
Cash, Cash Equivalents and Short-Term Investments	244.10M	435.50M	316.10M	305.00M	230.90M	120.60M
Total Debt	784.60M	784.10M	783.20M	782.40M	781.60M	780.80M
Total Liabilities	12.52B	12.43B	12.15B	11.66B	11.11B	10.24B
Stockholders Equity	3.22B	2.84B	2.47B	2.33B	3.14B	3.20B
Cash Flow
Free Cash Flow	844.80M	796.20M	349.80M	704.50M	815.70M	692.70M
Operating Cash Flow	853.70M	806.40M	361.70M	722.30M	823.70M	707.60M
Investing Cash Flow	-762.90M	-541.50M	-228.50M	-507.60M	-460.20M	-608.80M
Financing Cash Flow	-184.30M	-145.50M	-122.10M	-140.60M	-253.20M	-193.90M

Hanover Insurance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 168.39
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THG, the sentiment is Negative. The current price of 168.39 is below the 20-day moving average (MA) of 176.19, below the 50-day MA of 176.23, and above the 200-day MA of 167.12, indicating a neutral trend. The MACD of -1.72 indicates Positive momentum. The RSI at 35.94 is Neutral, neither overbought nor oversold. The STOCH value of 31.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for THG.

Hanover Insurance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCY	―	$4.27B	10.90	21.56%	1.65%	14.93%	22.19%
THG	―	$6.02B	11.12	19.23%	2.14%	4.47%	102.98%
AXS	―	$6.90B	8.45	15.07%	1.99%	6.87%	43.53%
RLI	―	$5.37B	15.53	19.49%	4.48%	3.72%	-16.23%
SIGI	―	$4.51B	11.64	12.22%	1.99%	10.98%	74.87%
Sector *	―	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
KMPR	―	$2.89B	8.68	12.21%	2.80%	2.75%	572.22%

Hanover Insurance Corporate Events

Hanover Insurance Announces $500M Senior Notes Offering

On August 19, 2025, The Hanover Insurance Group, Inc. announced the pricing of a $500 million senior notes offering with a 5.50% interest rate due in 2035. The proceeds from this issuance are intended to repay existing debts and for general corporate purposes, potentially impacting the company’s financial strategy and market positioning.

The most recent analyst rating on (THG) stock is a Buy with a $210.00 price target. To see the full list of analyst forecasts on Hanover Insurance stock, see the THG Stock Forecast page.

The Hanover Insurance Group’s Strong Q2 Earnings Call Highlights

The Hanover Insurance Group’s second-quarter earnings call painted a picture of robust performance and positive outlook. The sentiment was overwhelmingly positive, highlighted by record operating return on equity (ROE), significant earnings growth, and improved combined ratios. The Personal Lines and Specialty segments were standout performers, contributing to the company’s strong financial results. Despite facing challenges such as increased reserving in commercial auto and potential tariff impacts, the highlights significantly outweighed these lowlights, underscoring a strong performance and a promising future.

The Hanover Insurance Reports Strong Q2 2025 Results

The Hanover Insurance Group, Inc. is a prominent player in the U.S. insurance market, offering a range of property and casualty insurance solutions through independent agents and brokers, focusing on small and mid-sized businesses as well as personal insurance lines. In its latest earnings report, The Hanover Insurance Group announced a significant increase in net income and operating income for the second quarter of 2025, with net income reaching $157.1 million, or $4.30 per diluted share, a substantial rise from the previous year’s $40.5 million. The company also reported an operating income of $158.7 million, or $4.35 per diluted share, marking a strong performance across its business segments. Key financial metrics highlighted in the report include a combined ratio of 92.5%, with a notable improvement in the loss and loss adjustment expense ratio, which decreased by 6.5 points compared to the prior-year quarter. The Hanover also achieved a 16.7% increase in net investment income, driven by higher earned yields and increased cash flows. The company’s book value per share rose to $89.62, reflecting a 6.0% increase from March 31, 2025. Looking ahead, The Hanover Insurance Group’s management remains optimistic about the company’s prospects, emphasizing its strategic focus on disciplined underwriting and strong execution to drive profitable growth. The company is committed to leveraging its innovative product portfolio and investments to maintain its positive momentum into the second half of 2025.