Quarter: Third-quarter net income ascended 7.5% to $1 billion. Earnings per share advanced 28% to $2.11. Revenue inched up 2.4% to $6.5 billion. The gross margin expanded from 35% to 36% and the operating margin stretched from 21% to 23%. Travelers carries $5.3 billion of cash and equivalents and $6.3 billion of debt, equal to a debt-to-equity ratio of 0.3. Its subsidiaries receive top financial strength ratings, with grades of AA- from Standard & Poor's.
Valuation: Travelers' stock sells for a forward earnings multiple of 9.1, a book value multiple of 0.9, a sales multiple of 1 and a cash flow multiple of 7.3, 35%, 76%, 78% and 51% discounts to insurance industry averages. A trailing earnings multiple of 7.8 represents a 66% discount to the peer average and a 16% discount to Travelers' five-year average multiple of 9.3. The stock's PEG ratio, a measure of value relative to growth, of 0.9 signals a 10% discount.Dividend: Travelers pays a quarterly dividend of 36 cents, converting to an annual yield of 2.6% with a payout ratio of 20%. Travelers boosted its dividend from 33 cents in February. The company's board has a record of regular distribution increases.