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The Travelers Companies logged a -1.2% change during today's afternoon session, and is now trading at a price of $168.96 per share.

Over the last year, The Travelers Companies logged a -5.0% change, with its stock price reaching a high of $194.51 and a low of $157.33. Over the same period, the stock underperformed the S&P 500 index by -19.0%. As of April 2023, the company's 50-day average price was $165.07. The Travelers Companies, Inc., through its subsidiaries, provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United States and internationally. Based in New York, NY, the large-cap Finance company has 30,000 full time employees. The Travelers Companies has offered a 2.3% dividend yield over the last 12 months.

The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:

2018 2019 2020 2021 2022 2023
Revenue (MM) $30,282 $31,581 $31,981 $34,816 $36,884 $40,073
Interest Income (MM) $352 $344 $339 $340 $351 $366
Operating Margins 10.0% 10.0% 10.0% 13.0% 9.0% 6.0%
Net Margins 8.0% 8.0% 8.0% 11.0% 8.0% 5.0%
Net Income (MM) $2,523 $2,622 $2,697 $3,662 $2,842 $2,184
Depreciation & Amort. (MM) $803 $763 $789 $870 $826 $739
Earnings Per Share $9.28 $9.92 $10.52 $14.49 $11.77 $9.26
Diluted Shares (MM) 270 262 255 251 240 212
Free Cash Flow (MM) $4,380 $5,205 $6,519 $7,274 $6,465 $6,947
Net Current Assets (MM) -$6,534 -$3,495 -$284 -$980 -$10,716 -$14,940
Long Term Debt (MM) $81,272 $84,109 $87,314 $91,467 $94,052 $101,301
Net Debt / EBITDA 21.49 21.43 21.51 17.02 22.31 32.72

The Travelers Companies has growing revenues and no capital expenditures, decent operating margins with a negative growth trend, and generally positive cash flows. However, the firm has a highly leveraged balance sheet. Finally, we note that The Travelers Companies has flat EPS growth.

The Travelers Companies's Valuation Is in Line With Its Sector Averages:

The Travelers Companies has a trailing twelve month P/E ratio of 17.8, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of $17.41, the company has a forward P/E ratio of 9.5. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -0.0%. On this basis, the company's PEG ratio is -495.31, which indicates that its shares are overpriced. Furthermore, The Travelers Companies is likely overvalued compared to the book value of its equity, since its P/B ratio of 1.93 is higher than the sector average of 1.57. The company's shares are currently trading 19.9% above their Graham number.

The Travelers Companies Has an Average Rating of Hold:

The 17 analysts following The Travelers Companies have set target prices ranging from $167.0 to $230.0 per share, for an average of $193.18 with a hold rating. As of April 2023, the company is trading -14.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.

The Travelers Companies has a very low short interest because 1.2% of the company's shares are sold short. Institutions own 84.2% of the company's shares, and the insider ownership rate stands at 0.24%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $3,652,818,193.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.