Travelers Analysis: Dow Earnings

BOSTON (TheStreet) -- Travelers (TRV) has announced its fourth-quarter results.

Quarterly Synopsis: Fourth-quarter GAAP net income and operating income dropped by 17% and 11% to $1.95 and $1.89, respectively, hurt by favorable reserve adjustments and lower catastrophe losses in the year-ago quarter. Net premiums written grew 1% year-over-year in the fourth quarter. The company repurchased $1.6 billion of stock during the period and $5 billion during 2010, lessening the float and amplifying earnings per share. Though optimistic about the investment portfolio and the operating environment in 2011, management expects the consolidated loss ratio to increase modestly. Investment income is predicted to decline.

Earnings Performance: Travelers' adjusted earnings tally of $1.89, down 11% year-over-year, exceeded analysts' consensus estimate of $1.66 by 14%. By comparison, the company has an average earnings miss rate of 0.3%. But, it beat expectations by 23% in the previous quarter, signaling improvement. Its top line, down 1.9% year-over-year, outperformed the consensus target by 2.3%. By comparison, Travelers has an average sales beat rate of 4%.

Dividend Information: Travelers pays a quarterly dividend of 36 cents, converting to a lackluster annual yield of 2.6%. But, it has grown the distribution 15% in the past 12 months and 7.7% and 9.2% annually, on average, over three- and five-year periods, respectively.

Analyst Opinions: Of analysts covering Travelers, 10 recommend buying its shares, 11 advise holding and two suggest selling them. The stock has a median target of $61.23.

Barclays, Overweight, $66 Target
UBS, Buy, $64 Target
Goldman Sachs, Neutral, $61 Target
Credit Suisse, Neutral, $60 Target
Citigroup, Hold, $59 Target
JPMorgan, Neutral, $57 Target
Deutsche Bank, Sell, $51 Target
Blockbuster Timeline

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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