10 Best Property & Casualty Insurance Stocks to Buy

2) The Hanover Insurance Group, Inc. (NYSE:THG)

Average Upside Potential: 19.25%

The Hanover Insurance Group, Inc. (NYSE:THG) is a holding company whose primary business is providing property and casualty insurance products and services. It markets itself with the help of independent agents and brokers in the US while conducting business internationally via wholly-owned subsidiary, Chaucer Holdings Limited.

The company released its 2Q 2024 financial results, wherein, it reported net income of $40.5 million, or $1.12 per diluted share. This compares to a net loss of $69.2 million, or $1.94 per basic share, in the prior year quarter.

In 2Q 2024, it saw 9% operating ROE, and 12% on the YTD basis. These numbers demonstrate the progress it made on its margin improvement initiatives and the resiliency of business amidst weather volatility. The Hanover Insurance Group, Inc. (NYSE:THG)’s stock trades at ~12.67x its forward earnings, which is at a discount to the sectoral average of ~16.45x. Given its results, the current valuation levels seem justified.

The company saw improvement in underlying loss ratio in Personal Lines, strong profitability in Specialty, and healthy underlying margin gains in Core Commercial. Collectively, these drivers led the company in delivering an ex-CAT combined ratio of 88.5%. The strength of its market position and distinctive distribution strategy should continue to help The Hanover Insurance Group, Inc. (NYSE:THG).

Analysts at Oppenheimer initiated the coverage of the shares of The Hanover Insurance Group, Inc. (NYSE:THG). They upped their price objective from $150.00 to $165.00, giving an “Outperform” rating on 3^rd May.

According to Insider Monkey’s database of Q1 2024, 16 hedge funds held stakes in The Hanover Insurance Group, Inc. (NYSE:THG). The consolidated value of these stakes is ~$126.4 million.