Shares of Allstate closed at $37.33 Wednesday, returning 39% year-to-date, following an 11% decline during 2011. The shares trade 0.9 times their reported June 30 book value of $39.73, and for 8.5 times the consensus 2013 earnings estimate of $4.40, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $4.14. Based on a quarterly payout of 22 cents, the shares have a dividend yield of 2.36%. For 2011, Allstate reported net income of $788 million, or $1.51 a share, declining from $928 million, or $1.72 a share, during 2010. Total property-liability insurance premiums were $25.9 billion in 2011, matching the previous year's results, while claims and claims expenses totaled $20.2 billion, increasing from $19.0 billion in 2010. The company's combined ratio for its property-liability insurance business during 2011 was 103.4, increasing from 98.1. A combined ratio over 100 means that you are paying out more than the premiums you are taking in. Allstate has fared better so far during 2012, with combined ratio of 95.1. The company earned $1.2 billion during the first half of 2012, or $2.40 a share compared with a net loss of $100 million, or 19 cents a share, during the first half of 2011. The company estimates that its catastrophe losses for the first half of 2012 total $820 million. Credit Suisse analyst Michael Zaremski rates Allstate "Outperform," with a $41 price target, saying on August 5 that the second-quarter results showed "faster than expected underlying margin improvement in all major segments, partially offset by a lower investment income forecast given the continued drop in yields." Zaremski estimates that Allstate will earn $4.10 a share for all of 2012, followed by 2013 EPS of $4.28. The analyst also estimates that Allstate's book value will rise to $41.20 at the end of 2012. "We continue to believe shares will appreciate to levels just north of current book value as investors appreciate management's margin improvement initiatives within the homeowners' segment; which in a few years' time, should meaningfully cut off ALL's 'tail' in regards to the potential for outsized losses," he said. ALL data by YCharts
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Shares of The Travelers Companies closed at $64.80 Wednesday, returning 11% year-to-date, following a 9% return during 2010. The shares trade for 1.1 times their reported June 30 adjusted book value of $57.18, and for 10 times the consensus 2013 EPS estimate of $6.40. The consensus 2012 EPS estimate is $6.26. Travelers reported 2011 earnings of $1.4 billion, or $3.40 a share, declining from $3.2 billion, or $6.62 a share. Net premiums written increased to $22.2 billion in 2011, from $21.6 billion the previous year, but like Allstate, Travelers paid out more in claims than it earned in premiums. The 2011 combined ratio was 105.1. During the first half of 2012, the company's combined ratio was 96.3%, and the company reported net income of $1.3 billion, or $3.27 a share, increasing from $475 million, or $1.04 a share, during the first half of 2011. Wels Fargo analyst John Hall rates Travelers "Outperform," with a valuation range of $67 to $72, saying on August 9 after hosting meetings with the company's management that Travelers "is in the midst of a period of rate firming, which has the potential to lead to improving margins and better than projected book value growth." Hall said that "for the time being, the market seems to be following suit in seeking rate in
Interested in more on Travelers? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn