Dow's Best Value Plays in 'New Normal' Economy

Since the year-earlier quarter, Travelers has boosted its cash balance 24% to $6.8 billion while debt grew just 3% to $6.5 billion. The company's balance sheet now has a liquid tilt. And its debt-to-equity ratio of 0.2 is below the insurance-industry average, demonstrating restrained leverage.

Although the company's 2.3% dividend yield is unremarkable, its shares are cheap. Travelers sells at a price-to-earnings ratio of 9, a substantial discount to the market and property-and-casualty insurance peers. The stock is 67% cheaper than peers on the basis of trailing earnings and 23% cheaper on the basis of projected earnings.

Travelers has advanced 13% this year, more than the Dow, but less than the S&P 500. The company is boosting profitability by cutting costs, strengthening its durable balance sheet in the process. Those are signs of near-term profit growth and long-term operational discipline.

-- Reported by Jake Lynch in Boston.

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