Hanover Insurance (THG) AI Stock Analysis

• Market Cap: $6.20B
• Dividend Yield: 2.05%
• Average Volume (3M): 239.96K
• Price to Earnings (P/E): 11.5
• Beta (1Y): 0.30
• Revenue Growth: 4.47%
• EPS Growth: 102.98%
• Country: US
• Employees: 4,900
• Sector: Financial
• Sector Strength: 73
• Industry: Insurance - Property & Casualty
• EPS (TTM): 4.35
• Shares Outstanding: 35,770,447
• 10 Day Avg. Volume: 180,712
• 30 Day Avg. Volume: 239,961
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 1.11
• Enterprise Value/Gross Profit: 5.56
• Enterprise Value/Ebitda: 11.91
• 1Y Price Target: $195.83
• Price Target Upside: 12.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 81 Outperform
• Price Target: $195.00 ▲(12.44% Upside)

Hanover Insurance's stock is rated highly due to strong financial performance and positive earnings call results. The financial performance shows consistent growth, while technical indicators suggest stable momentum. The valuation is attractive, and despite some challenges noted in the earnings call, the positive outlook contributes to a robust overall score.

Positive Factors

Net Investment Income

Material uplift from net investment income is expected relative to peers.

Policy Deductibles

Higher policy deductibles are expected to improve loss-ratio profit margins significantly.

Profit Margins

Hanover’s home-insurance profit margins are on track to beat consensus, potentially by a meaningful margin.

Negative Factors

Peer Comparison

BMO's home insurance loss-ratio profit margin reaches approximately 64%, better than consensus' approximately 70%.

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 demonstrates a solid financial standing with a consistent upward trend in revenue and profitability. The income statement shows strong revenue growth and improved net profit margins. The balance sheet is stable with low leverage and a strong equity position. Cash flow metrics underscore effective cash management.

Income Statement

The income statement reflects a strong financial performance with consistent revenue growth from 2020 to TTM 2025. The TTM gross profit margin is high at approximately 94.7%, indicating efficient management of costs relative to revenue. There is a noticeable improvement in net profit margin from the previous year, reaching about 7.0% in TTM. However, there was a dip in EBIT margin, indicating some operational challenges, though EBITDA margin remains robust around 6.6%.

Balance Sheet

The balance sheet indicates a stable financial position with a debt-to-equity ratio of approximately 0.26 in TTM, suggesting manageable leverage. The return on equity shows improvement, standing at approximately 14.4% in TTM, reflecting efficient use of equity. The equity ratio is solid at about 19.7%, demonstrating a healthy proportion of equity financing, though some room for improvement exists compared to industry standards.

Cash Flow

The company's cash flow position is strong, with a positive trajectory in free cash flow growth. The operating cash flow to net income ratio is robust at approximately 1.8 in TTM, indicating strong cash generation relative to net income. Free cash flow to net income ratio is also favorable at around 1.77, highlighting efficient cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.27B	6.22B	5.96B	5.43B	5.16B	4.82B
Gross Profit	1.26B	1.24B	652.90M	716.30M	1.04B	1.02B
EBITDA	586.30M	573.40M	81.50M	191.00M	572.20M	500.10M
Net Income	438.70M	426.00M	35.30M	116.00M	422.80M	358.70M
Balance Sheet
Total Assets	15.47B	15.27B	14.61B	14.00B	14.25B	13.44B
Cash, Cash Equivalents and Short-Term Investments	315.10M	435.50M	316.10M	305.00M	230.90M	120.60M
Total Debt	784.30M	784.10M	783.20M	782.40M	781.60M	780.80M
Total Liabilities	12.43B	12.43B	12.15B	11.66B	11.11B	10.24B
Stockholders Equity	3.04B	2.84B	2.47B	2.33B	3.14B	3.20B
Cash Flow
Free Cash Flow	777.20M	796.20M	349.80M	704.50M	815.70M	692.70M
Operating Cash Flow	786.60M	806.40M	361.70M	722.30M	823.70M	707.60M
Investing Cash Flow	-579.00M	-540.90M	-228.50M	-507.60M	-460.20M	-608.80M
Financing Cash Flow	-157.60M	-145.50M	-122.10M	-140.60M	-253.20M	-193.90M

Hanover Insurance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 173.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THG, the sentiment is Positive. The current price of 173.42 is above the 20-day moving average (MA) of 171.79, above the 50-day MA of 168.31, and above the 200-day MA of 163.24, indicating a bullish trend. The MACD of 1.68 indicates Negative momentum. The RSI at 55.92 is Neutral, neither overbought nor oversold. The STOCH value of 71.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for THG.

Hanover Insurance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THG	81 Outperform	$6.20B	11.50	19.23%	2.05%	4.47%	102.98%
RLI	76 Outperform	$6.20B	19.31	19.49%	3.87%	10.29%	-4.70%
SIGI	75 Outperform	$4.74B	12.75	12.19%	1.95%	12.27%	66.53%
AXS	72 Outperform	$7.58B	9.20	15.07%	1.78%	6.87%	43.53%
WTM	69 Neutral	$4.73B	22.81	4.47%	0.05%	8.08%	-57.76%
Sector *	68 Neutral	$17.89B	12.03	10.28%	3.73%	9.80%	1.66%
KMPR	58 Neutral	$3.34B	10.02	12.21%	2.38%	2.75%	572.22%

Hanover Insurance Corporate Events

Hanover Insurance Holds Annual Shareholder Meeting

On May 13, 2025, The Hanover Insurance Group held its annual meeting where shareholders elected directors, approved executive compensation, and ratified PricewaterhouseCoopers LLP as the accounting firm for 2025. These decisions reflect the company’s ongoing governance practices and commitment to maintaining financial transparency and accountability.

The most recent analyst rating on (THG) stock is a Buy with a $162.00 price target. To see the full list of analyst forecasts on Hanover Insurance stock, see the THG Stock Forecast page.