Hanover Insurance (THG) AI Stock Analysis

• Market Cap: $6.16B
• Dividend Yield: 1.97%
• Average Volume (3M): 235.34K
• Price to Earnings (P/E): 10.0
• 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: 202,275
• 30 Day Avg. Volume: 235,342
• 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: 1.28
• Enterprise Value/Revenue: 1.22
• Enterprise Value/Gross Profit: 5.21
• Enterprise Value/Ebitda: 9.50
• 1Y Price Target: $200.80
• Price Target Upside: 15.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: $207.00 ▲(18.90% 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

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 in exchange for coverage, which constitutes its main revenue stream. Additionally, THG earns investment income from its portfolio of invested premiums and reserves, which is a critical component of its overall profitability. The company also engages in reinsurance arrangements, allowing it to manage risk and enhance cash flow. Strategic partnerships with independent agents and brokers play a significant role in expanding its market reach and customer base, contributing further to its earnings.

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: Negative
• Last Price: 174.09
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 174.09 is below the 20-day moving average (MA) of 182.12, below the 50-day MA of 180.31, and above the 200-day MA of 171.47, indicating a neutral trend. The MACD of -1.56 indicates Positive momentum. The RSI at 35.20 is Neutral, neither overbought nor oversold. The STOCH value of 11.64 is Positive, 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
RLI	83 Outperform	$5.52B	15.76	19.49%	4.05%	3.72%	-16.23%
THG	77 Outperform	$6.16B	10.01	20.02%	1.97%	5.26%	72.46%
SIGI	77 Outperform	$5.10B	13.01	12.22%	1.85%	10.98%	74.87%
AXS	70 Neutral	$7.88B	8.34	16.27%	1.80%	6.37%	68.32%
MCY	69 Neutral	$4.97B	11.30	21.47%	1.34%	6.18%	-21.28%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
KMPR	52 Neutral	$2.33B	10.38	9.03%	3.15%	4.51%	-8.29%

Hanover Insurance Corporate Events

Hanover Insurance Announces Redemption of 2026 Notes

On December 16, 2025, Hanover Insurance Group announced the redemption of its outstanding 4.500% Notes due 2026, originally issued in 2016. The redemption, scheduled for January 15, 2026, involves a total principal amount of $375 million, marking a significant financial maneuver for the company.

The most recent analyst rating on (THG) stock is a Hold with a $200.00 price target. To see the full list of analyst forecasts on Hanover Insurance stock, see the THG Stock Forecast page.