Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Hartford Financial Gains From Strategic Moves, Risks Remain

Published 11/13/2017, 09:09 PM
Updated 07/09/2023, 06:31 AM

The Hartford Financial Services Group, Inc’s (NYSE:HIG) strategic dispositions of its legacy run-off businesses have improved its risk profile. In addition, divesture of its non-core businesses along with strategic acquisitions and alliances have helped it concentrate on core U.S. operations.

The company also displays intelligent capital management by enhancing shareholders’ value through share buybacks and dividend payments on a regular basis.

Its shares have rallied nearly 16.3%, outperforming the industry’s gain of 11.4% in a year’s time. This reflects the company’s strong foothold in the property and casualty market.

The company’s capital appreciations, repayment of government funds and measures to de-risk its balance sheet have increased its financial strength. The company has also been able to successfully lower its debt burden through divestures and notes issuance.

Nevertheless, being a property and casualty insurer, the company also remains exposed to numerous catastrophic events, which often result in earnings volatility. Its third-quarter 2017 results were highly impacted by hurricanes Harvey and Irma.

Its Personal lines segment has also incurred considerable amount of auto liability loss. Continuing the previous trend, the segment’s revenues further declined in the first nine months of 2017. Also, the Talcott Resolution segment has been a drag for quite some time.

Consequently, the company’s valuation looks expensive at the current level. Looking at the company’s forward 12-month price-to-earnings (P/E-F1) ratio, investors may not want to pay any further premium. Currently, it has trailing 12-months P/E-F1 ratio of 15.1, which is higher than the industry average of 14.2.

Zacks Rank and Stocks to Consider

Hartford Financial presently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the insurance industry are Radian Group Inc. (NYSE:RDN) , First American Financial Corporation (NYSE:FAF) and Prudential Financial, Inc. (NYSE:PRU) . Each of the stocks holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Radian Group offers mortgage and real estate products and services in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 4.52%.

First American Financial offers financial services. The company delivered positive surprises in each of the last four quarters with an average beat of 12.74%.

Prudential Financial provides insurance, investment management, and other financial products and services in the United States and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 0.16%.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>



Radian Group Inc. (RDN): Free Stock Analysis Report

Hartford Financial Services Group, Inc. (The) (HIG): Free Stock Analysis Report

Prudential Financial, Inc. (PRU): Free Stock Analysis Report

First American Corporation (The) (FAF): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.