Travelers Companies Inc. Stock Buy Recommendation Reiterated (TRV)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Travelers Companies (NYSE: TRV) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 30.39% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TRV should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • TRAVELERS COS INC has improved earnings per share by 15.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, TRAVELERS COS INC increased its bottom line by earning $6.27 versus $3.34 in the prior year. This year, the market expects an improvement in earnings ($7.56 versus $6.27).
  • TRV's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 35.20% is the gross profit margin for TRAVELERS COS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.15% is above that of the industry average.

The Travelers Companies, Inc., through its subsidiaries, provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States. Travelers Companies has a market cap of $33.0 billion and is part of the financial sector and insurance industry. The company has a P/E ratio of 13.00, below the S&P 500 P/E ratio of 18.00. Shares are up 21% year to date as of the close of trading on Thursday.

You can view the full Travelers Companies Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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