Bull of the Day: Hanover Insurance Group (THG)

Core Viewpoint - The Hanover Insurance Group, Inc. is experiencing significant growth, with a record performance in 2024 and positive expectations for 2025, making it a strong investment opportunity in the current market uncertainty [1][6]. Financial Performance - In Q4 2024, Hanover reported earnings of $5.32 per share, exceeding the Zacks Consensus Estimate of $3.45 by $1.87, maintaining a perfect earnings surprise track record over the past five years [3][4]. - The full-year operating earnings reached $13.34 per share, the highest in the company's history, with an improved ex-CAT combined ratio of 88.4%, a decrease of 2.9 points [4]. Shareholder Returns - The company resumed share buybacks in Q4, repurchasing approximately 170,000 shares for $26.7 million, with $303 million remaining under the existing repurchase program [5]. - The quarterly dividend was increased by 5.9% to $0.90 per share, marking the 20th consecutive year of dividend increases, resulting in a yield of 2.1% [5]. Analyst Outlook - Analysts are optimistic about Hanover's performance in 2025, with the Zacks Consensus Estimate for earnings revised up to $14.47, indicating an 8.5% growth [6]. - For 2026, the consensus estimate is projected at $16.05, reflecting a further 10.9% earnings growth [7]. Market Position - Hanover's shares have shown resilience, up 3.4% year-to-date, outperforming the S&P 500, despite market volatility [9]. - The stock is considered undervalued, trading at a forward price-to-earnings (P/E) ratio of 11.9, making it an attractive option for investors seeking growth and dividend stability [11].