Hanover Insurance (THG) AI Stock Analysis

• Market Cap: $6.36B
• Dividend Yield: 2.01%
• Average Volume (3M): 213.60K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.28
• Revenue Growth: 5.26%
• EPS Growth: 72.46%
• Country: US
• Employees: 4,900
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 5.09
• Shares Outstanding: 35,583,965
• 10 Day Avg. Volume: 166,212
• 30 Day Avg. Volume: 213,603
• 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: 1.24
• Enterprise Value/Revenue: 1.22
• Enterprise Value/Gross Profit: 5.21
• Enterprise Value/Ebitda: 9.50
• 1Y Price Target: $201.00
• Price Target Upside: 12.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 17.86
• Revenue Forecast (FY): $6.41B

• Rating: 77 Outperform
• Price Target: $207.00 ▲(15.82% Upside)

Hanover Insurance's overall stock score reflects its strong financial performance and positive earnings call, which highlight robust growth and strategic positioning. The technical analysis suggests bullish momentum, although caution is warranted due to potential overbought conditions. The valuation is attractive, making the stock appealing for investors seeking growth and income.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business strategy, supporting long-term financial stability and expansion.

Investment Income

Rising investment income enhances profitability and provides additional financial resources for strategic initiatives, strengthening overall financial health.

Technological Advancements

Investing in technology improves operational efficiency and customer satisfaction, positioning the company for sustained competitive advantage.

Negative Factors

Expense Ratio Concerns

Higher expense ratios can pressure profitability and indicate challenges in cost management, potentially affecting long-term financial performance.

Middle Market Nonrenewals

Loss of large accounts in the middle market can hinder growth and signal competitive pressures, impacting future revenue streams.

Commercial Auto Challenges

Challenges in the commercial auto segment suggest ongoing risk management issues, potentially affecting profitability and requiring strategic adjustments.

Hanover Insurance Business Overview & Revenue Model

Company Description

Hanover Insurance Group (THG) is a leading provider of property and casualty insurance products and services in the United States. The company operates primarily through its subsidiaries, offering a diverse range of insurance solutions tailored for personal, commercial, and specialty markets. Its core products include automobile, homeowners, workers' compensation, and commercial property insurance, as well as innovative coverage options that cater to specific industries and customer needs.

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 strong financial performance with robust revenue growth, improving profitability, and a stable balance sheet. The company's effective cash flow management further strengthens its financial position, providing flexibility for future growth opportunities. While leverage has increased, it remains at a manageable level, supporting the company's strategic initiatives.

Income Statement

Hanover Insurance has demonstrated strong revenue growth with a TTM increase of 1.52% and a consistent upward trend over the past few years. The gross profit margin has slightly decreased from previous years, but the net profit margin has improved significantly to 9.74% in the TTM, indicating enhanced profitability. EBIT and EBITDA margins have remained stable, reflecting operational efficiency. Overall, the income statement shows a positive trajectory with robust revenue growth and improving profitability.

Balance Sheet

The company's balance sheet is stable with a manageable debt-to-equity ratio of 0.37 in the TTM, indicating a conservative leverage position. Return on equity has improved to 20.17%, showcasing effective use of equity to generate profits. The equity ratio remains healthy, suggesting a strong capital structure. While the debt level has increased, it remains within a reasonable range, supporting the company's growth strategy.

Cash Flow

Hanover Insurance's cash flow statement is strong, with a significant free cash flow growth rate of 18.83% in the TTM. The operating cash flow to net income ratio of 1.95 indicates efficient cash generation relative to earnings. The free cash flow to net income ratio is nearly 1, highlighting the company's ability to convert earnings into cash effectively. Overall, the cash flow position is robust, supporting both operational needs and potential investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.48B	6.22B	5.96B	5.43B	5.16B	4.82B
Gross Profit	1.51B	1.24B	652.90M	716.30M	1.04B	1.02B
EBITDA	830.80M	573.40M	81.50M	191.00M	572.20M	500.10M
Net Income	631.90M	426.00M	35.30M	116.00M	422.80M	358.70M
Balance Sheet
Total Assets	16.77B	15.27B	14.61B	14.00B	14.25B	13.44B
Cash, Cash Equivalents and Short-Term Investments	915.70M	2.02B	316.10M	305.00M	230.90M	7.58B
Total Debt	1.28B	784.10M	783.20M	782.40M	781.60M	780.80M
Total Liabilities	13.35B	12.43B	12.15B	11.66B	11.11B	10.24B
Stockholders Equity	3.43B	2.84B	2.47B	2.33B	3.14B	3.20B
Cash Flow
Free Cash Flow	1.00B	796.20M	349.80M	704.50M	815.70M	692.70M
Operating Cash Flow	1.01B	806.40M	361.70M	722.30M	823.70M	707.60M
Investing Cash Flow	-792.90M	-541.50M	-228.50M	-507.60M	-460.20M	-608.80M
Financing Cash Flow	270.00M	-145.50M	-122.10M	-140.60M	-253.20M	-193.90M

Hanover Insurance Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 178.73
• 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 178.73 is above the 20-day moving average (MA) of 176.33, above the 50-day MA of 177.04, and above the 200-day MA of 168.97, indicating a bullish trend. The MACD of 1.46 indicates Negative momentum. The RSI at 52.91 is Neutral, neither overbought nor oversold. The STOCH value of 41.57 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
RLI	81 Outperform	$5.83B	16.73	19.49%	4.13%	3.72%	-16.23%
SIGI	78 Outperform	$4.65B	12.08	12.22%	2.04%	10.98%	74.87%
THG	77 Outperform	$6.36B	10.47	20.02%	2.01%	5.26%	72.46%
MCY	69 Neutral	$4.87B	11.22	21.47%	1.67%	6.18%	-21.28%
AXS	68 Neutral	$7.76B	8.21	16.27%	1.74%	6.37%	68.32%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
KMPR	51 Neutral	$2.15B	9.63	9.03%	3.49%	4.51%	-8.29%

Hanover Insurance Corporate Events

Hanover Insurance Reports Strong Q3 Performance

The recent earnings call for The Hanover Insurance Group painted a positive picture, underscoring strong overall performance with exceptional third quarter results. The company demonstrated significant growth in Personal Lines, Core Commercial, and Specialty Lines. Despite facing challenges in the middle market segment, expense ratio management, and commercial auto, the strategic focus and robust investment income contribute to a positive outlook.

The Hanover Insurance Reports Record Third Quarter Earnings

The Hanover Insurance Group, Inc. is a leading property and casualty insurance provider in the United States, offering a range of insurance solutions for businesses and individuals through independent agents and brokers. In its latest earnings report, The Hanover announced record third-quarter net income and operating income per diluted share, demonstrating strong financial performance and strategic execution. Key highlights include a combined ratio of 91.1%, excluding catastrophes, and a significant increase in net investment income by 27.5% from the previous year. The company also reported a 4.5% growth in net premiums written, with notable renewal price increases across its Personal Lines, Core Commercial, and Specialty segments. Looking forward, The Hanover remains focused on sustaining its performance and investing in innovative capabilities to ensure long-term success, as indicated by its management’s positive outlook.

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.