Travelers Companies Inc Valuation – November 2018 $TRV

Company Profile (excerpt from Reuters): The Travelers Companies, Inc., incorporated on March 5, 1853, is a holding company. The Company operates through three segments: Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. The Company, through its subsidiaries, is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TRV – November 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $34,244,049,871 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 67.01% Pass
5. Moderate PEmg Ratio PEmg < 20 13.78 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.55 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $9.38
MG Growth Estimate 1.93%
MG Value $116.05
Opinion Overvalued
MG Grade B+
MG Value based on 3% Growth $136.08
MG Value based on 0% Growth $79.77
Market Implied Growth Rate 2.64%
Current Price $129.31
% of Intrinsic Value 111.42%

Travelers Companies Inc qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $8.31 in 2014 to an estimated $9.38 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 2.64% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Travelers Companies Inc revealed the company was trading below its Graham Number of $137.64. The company pays a dividend of $2.83 per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 13.78, which was below the industry average of 32.22, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Travelers Companies Inc performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Graham Number $137.64
PEmg 13.78
PB Ratio 1.55
Dividend Yield 2.19%
TTM Dividend $2.83
Number of Consecutive Years of Dividend Growth 12

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $5,964,000,000
Total Assets $104,390,000,000
Intangible Assets $4,309,000,000
Total Liabilities $81,930,000,000
Shares Outstanding (Diluted Average) 268,400,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $9.63
Dec2017 $7.33
Dec2016 $10.28
Dec2015 $10.88
Dec2014 $10.70
Dec2013 $9.74
Dec2012 $6.30
Dec2011 $3.36
Dec2010 $6.62
Dec2009 $6.33
Dec2008 $4.81
Dec2007 $6.85
Dec2006 $5.91
Dec2005 $2.33
Dec2004 $1.53
Dec2003 $3.80
Dec2002 -$0.07
Dec2001 -$5.22
Dec2000 $4.24
Dec1999 $3.41
Dec1998 $0.32

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $9.38
Dec2017 $9.44
Dec2016 $10.19
Dec2015 $9.49
Dec2014 $8.31
Dec2013 $6.90
Dec2012 $5.48
Dec2011 $5.25
Dec2010 $6.16
Dec2009 $5.71
Dec2008 $5.02
Dec2007 $4.78
Dec2006 $3.40
Dec2005 $1.59
Dec2004 $1.10
Dec2003 $1.00
Dec2002 -$0.09

Recommended Reading:

Other ModernGraham posts about the company

10 Most Undervalued Companies for the Defensive Investor – May 2016
10 Most Undervalued Companies for the Defensive Investor – February 2016
11 Best Stocks For Value Investors This Week – 11/21/15
Travelers Companies Inc. Valuation – November 2015 Update $TRV
5 Undervalued Dow Stocks to Research – November 2015

Other ModernGraham posts about related companies

Stewart Information Services Corp Valuation – August 2018 $STC
Kemper Corp Valuation – August 2018 $KMPR
CNO Financial Group Inc Valuation – August 2018 $CNO
Sun Life Financial Inc Valuation – August 2018 $TSE-SLF
American Financial Group Inc Valuation – August 2018 $AFG
Selective Insurance Group Inc Valuation – July 2018 $SIGI
Genworth Financial Inc Valuation – June 2018 $GNW
Prudential Financial Inc Valuation – June 2018 $PRU
Assurant Inc Valuation – June 2018 $AIZ
Torchmark Corp Valuation – June 2018 $TMK

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Travelers Companies Inc Valuation – February 2018 $TRV

Company Profile (obtained from Marketwatch): The Travelers Cos., Inc. operates as a holding company, which engages in the insurance business. It operates through the following segments: Business and International Insurance; Bond & Specialty Insurance; and Personal Insurance. The Business and International Insurance segment offers property and casualty insurance; and insurance related services. The Bond & Specialty Insurance segment provides surety; fidelity; management liability; professional liability; and other property and casualty coverage and related risk management services. The Personal Insurance segment includes property and casualty insurance covering individuals’ personal risks. The company was founded in 1853 and is headquartered in New York, NY.

TRV Chart

TRV data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TRV – February 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $38,246,261,539 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 68.06% Pass
5. Moderate PEmg Ratio PEmg < 20 14.80 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.62 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $9.44
MG Growth Estimate 2.04%
MG Value $118.68
Opinion Overvalued
MG Grade B-
MG Value based on 3% Growth $136.90
MG Value based on 0% Growth $80.25
Market Implied Growth Rate 3.15%
Current Price $139.74
% of Intrinsic Value 117.74%

Travelers Companies Inc qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $8.31 in 2014 to an estimated $9.44 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 3.15% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Travelers Companies Inc revealed the company was trading above its Graham Number of $138.27. The company pays a dividend of $2.83 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 14.8, which was below the industry average of 20.16, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Travelers Companies Inc performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Graham Number $138.27
PEmg 14.80
PB Ratio 1.62
Dividend Yield 2.03%
TTM Dividend $2.83
Number of Consecutive Years of Dividend Growth 12

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Long-Term Debt & Capital Lease Obligation $6,571,000,000
Total Assets $103,483,000,000
Intangible Assets $4,293,000,000
Total Liabilities $79,752,000,000
Shares Outstanding (Diluted Average) 275,600,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $9.80
Dec2017 $7.33
Dec2016 $10.28
Dec2015 $10.88
Dec2014 $10.70
Dec2013 $9.74
Dec2012 $6.30
Dec2011 $3.36
Dec2010 $6.62
Dec2009 $6.33
Dec2008 $4.81
Dec2007 $6.85
Dec2006 $5.91
Dec2005 $2.33
Dec2004 $1.53
Dec2003 $3.80
Dec2002 -$0.07
Dec2001 -$5.22
Dec2000 $4.24
Dec1999 $3.41
Dec1998 $0.32

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $9.44
Dec2017 $9.44
Dec2016 $10.19
Dec2015 $9.49
Dec2014 $8.31
Dec2013 $6.90
Dec2012 $5.48
Dec2011 $5.25
Dec2010 $6.16
Dec2009 $5.71
Dec2008 $5.02
Dec2007 $4.78
Dec2006 $3.40
Dec2005 $1.59
Dec2004 $1.10
Dec2003 $1.00
Dec2002 -$0.09

Recommended Reading:

Other ModernGraham posts about the company

10 Most Undervalued Companies for the Defensive Investor – May 2016
10 Most Undervalued Companies for the Defensive Investor – February 2016
11 Best Stocks For Value Investors This Week – 11/21/15
Travelers Companies Inc. Valuation – November 2015 Update $TRV
5 Undervalued Dow Stocks to Research – November 2015

Other ModernGraham posts about related companies

Hanover Insurance Group Valuation – Initial Coverage $THG
Prudential Financial Inc Valuation – July 2017 $PRU
Assurant Inc Valuation – March 2017 $AIZ
American International Group Inc Valuation – March 2017 $AIG
Torchmark Corporation Valuation – March 2017 $TMK
Humana Inc Valuation – Initial Coverage $HUM
Chubb Ltd Valuation – March 2017 $CB
Stewart Information Services Corp Valuation – Initial Coverage $STC
Loews Corporation – February 2017 $L
Kemper Corp Valuation – Initial Coverage $KMPR

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Travelers Companies Inc Valuation – November 2016 $TRV

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – August 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Travelers Companies Inc (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc. is a holding company. The Company, through its subsidiaries, is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. It operates through three segments: Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Business and International Insurance offers an array of property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, Brazil and throughout other parts of the world. Bond & Specialty Insurance provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of domestic customers. Personal Insurance writes a range of property and casualty insurance covering individuals’ personal risks.

TRV Chart

TRV data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
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Downloadable PDF version of this valuation:

moderngraham-valuation-of-trv-november-2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $32,166,938,864 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 71.82% Pass
5. Moderate PEmg Ratio PEmg < 20 11.48 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.34 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

trv-value-chart-november-2016

EPSmg $9.87
MG Growth Estimate 11.99%
MG Value $320.65
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $143.12
MG Value based on 0% Growth $83.90
Market Implied Growth Rate 1.49%
Current Price $113.35
% of Intrinsic Value 35.35%

Travelers Companies Inc qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $5.48 in 2012 to an estimated $9.87 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.49% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Travelers Companies Inc revealed the company was trading below its Graham Number of $134.38. The company pays a dividend of $1.95 per share, for a yield of 1.7% Its PEmg (price over earnings per share – ModernGraham) was 11.48, which was below the industry average of 16.56, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Travelers Companies Inc performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

trv-charts-november-2016

Graham Number $134.38
PEmg 11.48
PB Ratio 1.34
Dividend Yield 1.72%
TTM Dividend $1.95
Number of Consecutive Years of Dividend Growth 1

 

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Long-Term Debt & Capital Lease Obligation $6,436,000,000
Total Assets $102,787,000,000
Intangible Assets $3,856,000,000
Total Liabilities $78,348,000,000
Shares Outstanding (Diluted Average) 289,800,000

Earnings Per Share History

Next Fiscal Year Estimate $9.33
Dec2015 $10.88
Dec2014 $10.70
Dec2013 $9.74
Dec2012 $6.30
Dec2011 $3.36
Dec2010 $6.62
Dec2009 $6.33
Dec2008 $4.81
Dec2007 $6.85
Dec2006 $5.91
Dec2005 $2.33
Dec2004 $1.53
Dec2003 $3.80
Dec2002 -$0.07
Dec2001 -$5.22
Dec2000 $4.24
Dec1999 $3.41
Dec1998 $0.32
Dec1997 $3.97
Dec1996 $2.84

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $9.87
Dec2015 $9.49
Dec2014 $8.31
Dec2013 $6.90
Dec2012 $5.48
Dec2011 $5.25
Dec2010 $6.16
Dec2009 $5.71
Dec2008 $5.02
Dec2007 $4.78
Dec2006 $3.40
Dec2005 $1.59
Dec2004 $1.10
Dec2003 $1.00
Dec2002 -$0.09
Dec2001 $0.38
Dec2000 $3.11

Recommended Reading:

Other ModernGraham posts about the company

10 Most Undervalued Companies for the Defensive Investor – May 2016
10 Most Undervalued Companies for the Defensive Investor – February 2016
11 Best Stocks For Value Investors This Week – 11/21/15
Travelers Companies Inc. Valuation – November 2015 Update $TRV
5 Undervalued Dow Stocks to Research – November 2015

Other ModernGraham posts about related companies

Unum Group Valuation – August 2016 $UNM
Principal Financial Group Inc Valuation – August 2016 $PFG
Assurant Inc Valuation – August 2016 $AIZ
American International Group Inc Valuation – August 2016 $AIG
Humana Inc Valuation – August 2016 $HUM
Chubb Limited Valuation – August 2016 $CB
Torchmark Corporation Valuation – August 2016 $TMK
Anthem Inc Valuation – August 2016 $ANTM
American Financial Group Inc Valuation – August 2016 $AFG
AFLAC Inc Valuation – August 2016 $AFL

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

The Travelers Companies Valuation – May 2016 $TRV

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – March 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how The Travelers Companies (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc. is a holding company. The Company, through its subsidiaries, is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. It operates through three segments: Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Business and International Insurance offers an array of property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, Brazil and throughout other parts of the world. Bond & Specialty Insurance provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of domestic customers. Personal Insurance writes a range of property and casualty insurance covering individuals’ personal risks.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of TRV – May 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $32,253,300,176 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 67.13% Pass
5. Moderate PEmg Ratio PEmg < 20 11.53 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.36 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

TRV value Chart May 2016

EPSmg $9.60
MG Growth Estimate 11.25%
MG Value $297.64
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $139.20
MG Value based on 0% Growth $81.60
Market Implied Growth Rate 1.52%
Current Price $110.73
% of Intrinsic Value 37.20%

Travelers Companies Inc qualifies for both the Defensive Investor and the Enterprising Investor. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $5.49 in 2012 to an estimated $9.6 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.52% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

Travelers Companies Inc fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

TRV Charts May 2016

Graham Number $125.87
PEmg 11.53
PB Ratio 1.36
Current Dividend $2.44
Dividend Yield 2.20%
Number of Consecutive Years of Dividend Growth 11

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2016
Long-term Debt $6,344,000,000
Total Assets $101,680,000,000
Intangible Assets $3,863,000,000
Total Liabilities $77,514,000,000
Shares Outstanding (Diluted Average) 297,900,000

Earnings Per Share History

Next Fiscal Year Estimate $8.52
12/1/2015 $10.88
12/1/2014 $10.70
12/1/2013 $9.74
12/1/2012 $6.30
12/1/2011 $3.36
12/1/2010 $6.62
12/1/2009 $6.33
12/1/2008 $4.82
12/1/2007 $6.86
12/1/2006 $5.91
12/1/2005 $2.33
12/1/2004 $1.53
12/1/2003 $2.72
12/1/2002 $0.92
12/1/2001 -$5.22
12/1/2000 $4.24
12/1/1999 $3.41
12/1/1998 $0.32
12/1/1997 $3.83
12/1/1996 $2.47

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $9.60
12/1/2015 $9.49
12/1/2014 $8.31
12/1/2013 $6.90
12/1/2012 $5.49
12/1/2011 $5.25
12/1/2010 $6.17
12/1/2009 $5.71
12/1/2008 $5.03
12/1/2007 $4.71
12/1/2006 $3.32
12/1/2005 $1.50
12/1/2004 $1.01
12/1/2003 $0.90
12/1/2002 $0.24
12/1/2001 $0.37
12/1/2000 $3.06

Recommended Reading:

Other ModernGraham posts about the company

10 Most Undervalued Companies for the Defensive Investor – May 2016
10 Most Undervalued Companies for the Defensive Investor – February 2016
11 Best Stocks For Value Investors This Week – 11/21/15
Travelers Companies Inc. Valuation – November 2015 Update $TRV
5 Undervalued Dow Stocks to Research – November 2015

Other ModernGraham posts about related companies

Unum Group Valuation – March 2016 $UNM
Principal Financial Group Inc Valuation – March 2016 $PFG
Assurant Inc Valuation – February 2016 $AIZ
American International Group Inc Stock Valuation – February 2016 $AIG
Chubb Ltd Stock Valuation – February 2016 $CB
Humana Inc Stock Valuation – February 2016 $HUM
Prudential Financial Inc Valuation – February 2016 $PRU
Anthem Inc Valuation – February 2016 $ANTM
American Financial Group Inc Valuation – February 2016 $AFG
Aflac Inc Valuation – February 2016 $AFL

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Travelers Companies Inc. Valuation – November 2015 Update $TRV

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – November 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Travelers Companies Inc. (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc. is a holding company. Through its subsidiaries, the Company is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, Government units, associations and individuals. The Company has three operating segments: Business and International Insurance segment, Bond & Specialty Insurance segment and the Personal Insurance segment. Business and International Insurance segment offers a range of property and casualty insurance and insurance related services to its customers, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world. Bond & Specialty Insurance segment provides surety, crime, management and professional liability coverages, and related risk management services. Personal Insurance segment includes a range of property and casualty insurance covering individuals’ personal risks.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of TRV – November 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $34,118,082,441 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 75.31% Pass
5. Moderate PEmg Ratio PEmg < 20 12.04 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.45 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

TRV value Chart November 2015

EPSmg $9.33
MG Growth Estimate 11.64%
MG Value $296.43
Opinion Undervalued
MG Value based on 3% Growth $135.22
MG Value based on 0% Growth $79.27
Market Implied Growth Rate 1.77%
Current Price $112.28
% of Intrinsic Value 37.88%

Travelers Companies Inc. qualifies for both the Enterprising Investor and the more conservative Defensive Investor.  In fact, the company passes all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial condition.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $5.25 in 2011 to an estimated $9.33 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.77% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Travelers Companies Inc. (TRV)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

TRV Charts November 2015

Graham Number $135.83
PEmg 12.04
PB Ratio 1.45
Dividend Yield 2.07%
Number of Consecutive Years of Dividend Growth 10

 

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Long-Term Debt $6,743,000,000
Total Assets $102,110,000,000
Intangible Assets $3,859,000,000
Total Liabilities $78,077,000,000
Shares Outstanding (Diluted Average) 311,000,000

Earnings Per Share History

Next Fiscal Year Estimate $10.38
Dec14 $10.70
Dec13 $9.74
Dec12 $6.30
Dec11 $3.36
Dec10 $6.62
Dec09 $6.33
Dec08 $4.81
Dec07 $6.86
Dec06 $5.91
Dec05 $2.33
Dec04 $1.53
Dec03 $3.80
Dec02 $0.92
Dec01 -$5.22
Dec00 $4.24
Dec99 $3.41
Dec98 $0.32
Dec97 $3.97
Dec96 $2.84
Dec95 $2.84

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $9.33
Dec14 $8.31
Dec13 $6.90
Dec12 $5.48
Dec11 $5.25
Dec10 $6.17
Dec09 $5.71
Dec08 $5.03
Dec07 $4.79
Dec06 $3.47
Dec05 $1.72
Dec04 $1.29
Dec03 $1.26
Dec02 $0.24
Dec01 $0.38
Dec00 $3.11
Dec99 $2.58

Recommended Reading:

Other ModernGraham posts about the company

5 Undervalued Dow Stocks to Research – November 2015
The Best Companies of the Insurance Industry – October 2015
10 Low PE Stocks for the Defensive Investor – October 2015
10 Most Undervalued Companies for the Defensive Investor – September 2015
10 Low PE Stocks for the Defensive Investor – August 2015

Other ModernGraham posts about related companies

Lincoln National Corp Valuation – November 2015 Update $LNC
Unum Group Valuation – November 2015 Update $UNM
Principal Financial Group Valuation – November 2015 Update $PFG
Assurant Inc. Valuation – November 2015 Update $AIZ
American International Group Inc. Valuation – November 2015 Update $AIG
Cincinnati Financial Corp Valuation – November 2015 Update $CINF
American Financial Group Inc. Valuation – November 2015 Update $AFG
Loews Corporation Valuation – November 2015 Update $L
Allstate Corporation Valuation – October 2015 Update $ALL
Humana Inc. Valuation – October 2015 Update $HUM

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Travelers Companies Analysis – August 2015 Update $TRV

In the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Travelers Companies (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc. is a holding company. Through its subsidiaries, the Company is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, Government units, associations and individuals. The Company has three operating segments: Business and International Insurance segment, Bond & Specialty Insurance segment and the Personal Insurance segment. Business and International Insurance segment offers a range of property and casualty insurance and insurance related services to its customers, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world. Bond & Specialty Insurance segment provides surety, crime, management and professional liability coverages, and related risk management services. Personal Insurance segment includes a range of property and casualty insurance covering individuals’ personal risks.
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To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of TRV

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end Pass
5. Moderate PEmg Ratio PEmg < 20 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg 8.88
MG Growth Estimate 10.37%
MG Value $259.72
Opinion Undervalued
MG Value based on 3% Growth $128.79
MG Value based on 0% Growth $75.50
Market Implied Growth Rate 1.81%
Current Price $107.71
% of Intrinsic Value 41.47%

Travelers Companies qualifies for both the Defensive Investor and the Enterprising Investor.  The company passes all of the requirements of both investor types, an accomplishment indicative of the company’s strong financial position.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the next stage of the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $5.25 in 2011 to an estimated $8.88 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.81% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Travelers Companies (TRV)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

TRV Charts - August 2015

PEmg 12.13
PB Ratio 1.42
Dividend Yield 2.10%
Number of Consecutive Years of Dividend Growth 10

 

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Long-Term Debt $6,350,000,000
Total Assets $101,664,000,000
Intangible Assets $3,878,000,000
Total Liabilities $77,543,000,000
Shares Outstanding (Diluted Average) 318,000,000

Earnings Per Share History

Next Fiscal Year Estimate $9.05
Dec14 $10.70
Dec13 $9.74
Dec12 $6.30
Dec11 $3.36
Dec10 $6.62
Dec09 $6.33
Dec08 $4.82
Dec07 $6.86
Dec06 $5.91
Dec05 $2.33
Dec04 $1.53
Dec03 $2.72
Dec02 $0.92
Dec01 -$5.22
Dec00 $4.24
Dec99 $3.41
Dec98 $0.32
Dec97 $3.83
Dec96 $2.47
Dec95 $2.84

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $8.88
Dec14 $8.31
Dec13 $6.90
Dec12 $5.49
Dec11 $5.25
Dec10 $6.17
Dec09 $5.71
Dec08 $5.03
Dec07 $4.71
Dec06 $3.32
Dec05 $1.50
Dec04 $1.01
Dec03 $0.90
Dec02 $0.24
Dec01 $0.37
Dec00 $3.06
Dec99 $2.51

Recommended Reading:

Other ModernGraham posts about the company

10 Most Undervalued Companies for the Defensive Investor – August 2015
5 Undervalued Dow Stocks to Research – August 2015
5 Low PE Stocks for the Defensive Investor – July 2015
5 Undervalued Dow Stocks to Research – July 2015
The Best Companies of the Insurance Industry – June 2015

Other ModernGraham posts about related companies

Lincoln National Corporation Analysis – August 2015 Update $LNC
Unum Group Analysis – August 2015 Update $UNM
Principal Financial Group Analysis – August 2015 Update $PFG
Assurant Inc. Analysis – August 2015 Update $AIZ
Arthur J Gallagher & Company Analysis – Initial Coverage $AJG
American International Group Inc. Analysis – August 2015 Update $AIG
Aspen Insurance Holdings Limited Analysis – Initial Coverage $AHL
Cincinnati Financial Corporation Analysis – August 2015 Update $CINF
American Financial Group Inc. Analysis – Initial Coverage $AFG
Allstate Corporation Analysis – July 2015 Update $ALL

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.

[/level-mg-stocks-screens-subscriber]

Travelers Companies Inc. Quarterly Valuation – May 2015 $TRV

500px-The_Travelers_Companies.svgIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Travelers Companies Inc. (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc., is a holding company engaged, through its subsidiaries, in providing commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. The Company’s product line includes: Workers’ Compensation, provides coverage for employers for specified benefits for workplace injuries to employees; Commercial Automobile, provides coverage for businesses against losses incurred from personal bodily injury, injury to third parties, property damage to an insured’s vehicle and property damage to other vehicles and other property resulting from the ownership; Commercial Property, provides coverage for loss of and damage to buildings, inventory and equipment resulting from covered property damage; General Liability, Insures businesses against third-party claims arising from accidents occurring on their premises; Commercial Multi-Peril, provides a combination of the property and liability coverage.
TRV Chart

TRV data by YCharts

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $103.10
MG Value $253.10
MG Opinion Undervalued
Value Based on 3% Growth $127.58
Value Based on 0% Growth $74.79
Market Implied Growth Rate 1.61%
PEmg 11.72
PB Ratio 1.35

Balance Sheet – March 2015

Total Debt $6,349,000,000
Total Assets $102,691,000,000
Intangible Assets $3,882,000,000
Total Liabilities $77,844,000,000
Outstanding Shares 324,500,000

Earnings Per Share

2015 (estimate) $8.80
2014 $10.70
2013 $9.74
2012 $6.30
2011 $3.36
2010 $6.62
2009 $6.33
2008 $4.82
2007 $6.86
2006 $5.91
2005 $2.33

Earnings Per Share – ModernGraham 

2015 (estimate) $8.80
2014 $8.31
2013 $6.90
2012 $5.49
2011 $5.25
2010 $6.17

Dividend History
TRV Dividend Chart

TRV Dividend data by YCharts

Conclusion

Travelers Companies qualifies for both the Defensive Investor and the Enterprising Investor.  The company passes all of the requirements of both investor types, a rare accomplishment.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $5.25 in 2011 to an estimated $8.80 for 2015.  This level of demonstrated growth outpaces the market’s implied estimate of 1.61% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Travelers Companies Inc. (TRV)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Travelers Companies Inc. Quarterly Valuation – February 2015 $TRV

500px-The_Travelers_Companies.svgIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Travelers Companies Inc. (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc. (TRV) is a holding company. The Company, through its subsidiaries, is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, Government units, associations and individuals. The Company is organized into three business segments: Business Insurance; Financial, Professional and International Insurance, and Personal Insurance. The Business Insurance segment offers an array of property and casualty insurance and insurance-related services to its clients primarily in the United States. The Financial, Professional and International Insurance segment includes surety and financial liability coverage’s, which primarily use credit-based underwriting processes, as well as property and casualty products that are marketed on a domestic basis. In November 2013, the Company completed the sale of its wholly owned subsidiary The Dominion of Canada General Insurance Company to The Travelers Companies, Inc.

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $107.98
MG Value $157.45
MG Opinion Undervalued
Value Based on 3% Growth $120.54
Value Based on 0% Growth $70.66
Market Implied Growth Rate 2.24%
PEmg 12.99
PB Ratio 1.44

Balance Sheet – December 2014

Total Debt $6,349,000,000
Total Assets $103,078,000,000
Intangible Assets $3,915,000,000
Total Liabilities $78,242,000,000
Outstanding Shares 330,500,000

Earnings Per Share

2014 $10.70
2013 $9.74
2012 $6.30
2011 $3.36
2010 $6.62
2009 $6.33
2008 $4.82
2007 $6.86
2006 $5.91
2005 $2.33
2004 $1.53

Earnings Per Share – ModernGraham 

2014 $8.31
2013 $6.90
2012 $5.49
2011 $5.25
2010 $6.17
2009 $5.71

Dividend History

Conclusion:

Travelers Companies is suitable for both the Defensive Investor and the Enterprising Investor.  In fact, the company passes all of the requirements of both investor types, an impressive accomplishment.  As a result, value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $6.17 in 2010 to $8.31 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 2.24% annual earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out previous ModernGraham valuations of Travelers Companies (TRV) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Travelers Companies (TRV)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Travelers Companies (TRV) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Travelers Companies Quarterly Valuation – November 2014 $TRV

500px-The_Travelers_Companies.svgIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Travelers Companies (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc. (TRV) is a holding company. The Company, through its subsidiaries, is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, Government units, associations and individuals. The Company is organized into three business segments: Business Insurance; Financial, Professional and International Insurance, and Personal Insurance. The Business Insurance segment offers an array of property and casualty insurance and insurance-related services to its clients primarily in the United States. The Financial, Professional and International Insurance segment includes surety and financial liability coverage’s, which primarily use credit-based underwriting processes, as well as property and casualty products that are marketed on a domestic basis. In November 2013, the Company completed the sale of its wholly owned subsidiary The Dominion of Canada General Insurance Company to The Travelers Companies, Inc.

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $103.07
MG Value $140.07
MG Opinion Undervalued
Value Based on 3% Growth $116.19
Value Based on 0% Growth $68.11
Market Implied Growth Rate 2.18%
PEmg 12.86
PB Ratio 1.38

Balance Sheet – September 2014

Total Debt $6,348,000,000
Total Assets $104,522,000,000
Intangible Assets $3,937,000,000
Total Liabilities $79,201,000,000
Outstanding Shares 338,900,000

Earnings Per Share

2014 (estimate) $9.80
2013 $9.74
2012 $6.30
2011 $3.36
2010 $6.62
2009 $6.33
2008 $4.82
2007 $6.86
2006 $5.91
2005 $2.33
2004 $1.53

Earnings Per Share – ModernGraham 

2014 (estimate) $8.01
2013 $6.90
2012 $5.49
2011 $5.25
2010 $6.17
2009 $5.71

Dividend History

Conclusion:

Travelers Companies is suitable for both the Defensive Investor and the Enterprising Investor.  The company passes all of the requirements of both investor types, which is an impressive accomplishment.  As a result, intelligent investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $6.17 in 2010 to an estimated $8.018 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 2.18% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out previous ModernGraham valuations of Travelers Companies (TRV) for better perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Travelers Companies (TRV)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Travelers Companies (TRV) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

The Travelers Companies Quarterly Valuation – August 2014 $TRV

500px-The_Travelers_Companies.svgIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how The Travelers Companies (TRV) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): The Travelers Companies, Inc. (TRV) is a holding company. The Company, through its subsidiaries, is engaged in providing a range of commercial and personal property and casualty insurance products and services to businesses, Government units, associations and individuals. The Company is organized into three business segments: Business Insurance; Financial, Professional and International Insurance, and Personal Insurance. The Business Insurance segment offers an array of property and casualty insurance and insurance-related services to its clients primarily in the United States. The Financial, Professional and International Insurance segment includes surety and financial liability coverage’s, which primarily use credit-based underwriting processes, as well as property and casualty products that are marketed on a domestic basis. In November 2013, the Company completed the sale of its wholly owned subsidiary The Dominion of Canada General Insurance Company to The Travelers Companies, Inc.

TRV Chart

TRV data by YCharts

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $91.27
MG Value $115.06
MG Opinion Fairly Valued
Value Based on 3% Growth $109.82
Value Based on 0% Growth $64.38
Market Implied Growth Rate 1.78%
PEmg 12.05
PB Ratio 1.21

Balance Sheet – 6/30/2014

Total Debt $6,347,000,000
Total Assets $104,811,000,000
Intangible Assets $3,962,000,000
Total Liabilities $79,279,000,000
Outstanding Shares 339,000,000

Earnings Per Share

2014 (estimate) $8.38
2013 $9.81
2012 $6.34
2011 $3.39
2010 $6.67
2009 $6.37
2008 $4.81
2007 $6.86
2006 $5.91
2005 $2.95
2004 $1.53

Earnings Per Share – ModernGraham 

2014 (estimate) $7.57
2013 $6.95
2012 $5.52
2011 $5.28
2010 $6.19
2009 $5.76

Dividend History
TRV Dividend Chart

TRV Dividend data by YCharts

Conclusion:

The Travelers Companies qualifies for either the Defensive Investor or the Enterprising Investor.  In fact, the company achieves the rare feat of passing all of the requirements of both investor types.  As a result, value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears fairly valued after growing its EPSmg (normalized earnings) from $6.19 in 2010 to an estimated $7.57 for 2014.  This level of demonstrated growth supports the market’s implied estimate of 1.78% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the market price.

Be sure to check out the previous ModernGraham valuations of The Travelers Companies (TRV) for more perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on The Travelers Companies (TRV)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Travelers Companies (TRV) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

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