December 7, 2023
Top 10 Stock Hanover Insurance Group Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Hanover Insurance Group – Top 10 Stock in Dow Jones U.S. Insurance Index
Hanover Insurance Group is listed as a top 10 stock on December 07, 2023 in the market index D.J. US Insurance because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 12 (12% performer), Obermatt issues an overall sell recommendation for Hanover Insurance Group on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Property & Casualty Insurance |
| Index | D.J. US Insurance, S&P MIDCAP |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Hanover Insurance Group Sell
| 360 METRICS | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 60 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 86 |
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| SENTIMENT | ||||||||
| SENTIMENT | 12 |
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| 360° VIEW | ||||||||
| 360° VIEW | 12 |
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ANALYSIS: With an Obermatt 360° View of 12 (better than 12% compared with alternatives), overall professional sentiment and financial characteristics for the stock Hanover Insurance Group are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Hanover Insurance Group. The consolidated Value Rank has an attractive rank of 60, which means that the share price of Hanover Insurance Group is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 60% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 86. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 12. Professional investors are more confident in 88% other stocks. The consolidated Growth Rank also has a low rank of 5, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 95 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 12, Hanover Insurance Group is worse than 88% of all alternative stock investment opportunities based on the Obermatt Method. This means that Hanover Insurance Group shares are on the riskier side for investors. The picture is mixed here. The stock seems to be a good value (Value Rank of 60), and the financing structure is on the safer side (Safety Rank of 86). However, sentiment in the professional investor community is below-average (Sentiment Rank of 12), as is the growth momentum for the company (Growth Rank of 5). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Hanover Insurance Group negative
ANALYSIS: With an Obermatt Sentiment Rank of 12 (better than 12% compared with alternatives), overall professional sentiment and engagement for the stock Hanover Insurance Group is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Hanover Insurance Group. Analyst Opinions are at a rank of 81 (better than 81% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 16, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Hanover Insurance Group. The Professional Investors rank is also low at 14, meaning that professional investors hold less stock in this company than in 86% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 15, which means that the current professional news and professional social networks are critical of this company (more negative news than for 85% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 12 (less encouraging than 88% compared with investment alternatives), Hanover Insurance Group has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Hanover Insurance Group Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 60 (better than 60% compared with alternatives), Hanover Insurance Group shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Hanover Insurance Group. Price-to-Sales (P/S) is 75, which means that the stock price compared with what market professionals expect for future sales is lower than for 75% of comparable companies, indicating a good value concerning Hanover Insurance Group's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 70, which means that dividends are expected to be higher than for 70% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 60% of alternatives (only 40% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 52% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 60, is a buy recommendation based on Hanover Insurance Group's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Hanover Insurance Group Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 5 (better than 5% compared with alternatives), Hanover Insurance Group shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Hanover Insurance Group. Sales Growth has a rank of 35, which means that currently professionals expect the company to grow less than 65% of its competitors. The same is valid for Profit Growth, with a rank of 8, and Capital Growth with 29. In addition, Stock Returns have a below market rank of 15, which means that the stock returns have recently been below 85% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 5, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Hanover Insurance Group Debt Financing Safety very solid
| SAFETY METRICS | December 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 57 |
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| REFINANCING | ||||||||
| REFINANCING | 6 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 83 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 86 |
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ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2022, the company Hanover Insurance Group has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Hanover Insurance Group is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Hanover Insurance Group. Leverage is at a rank of 57, meaning the company has a below-average debt-to-equity ratio. It has less debt than 57% of its competitors. Liquidity is also good at a rank of 83, meaning the company generates more profit to service its debt than 83% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 6, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), Hanover Insurance Group has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Hanover Insurance Group. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Hanover Insurance Group Top Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 60 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 83 |
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| COMBINED | ||||||||
| COMBINED | 96 |
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ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), Hanover Insurance Group (Property & Casualty Insurance, USA) shares have much better financial characteristics than comparable stocks. Shares of Hanover Insurance Group are a good value (attractively priced) with a consolidated Value Rank of 60 (better than 60% of alternatives), are safely financed (Safety Rank of 86, which means low debt burdens), but show below-average growth (Growth Rank of 5). ...read more
RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on Hanover Insurance Group's financial characteristics. As the company Hanover Insurance Group's key financial metrics exhibit good value (Obermatt Value Rank of 60) but low growth (Obermatt Growth Rank of 5) while being safely financed (Obermatt Safety Rank of 86), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 60% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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