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Travelers Hits a New 52-Week High on Solid Q3 Performance

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On Nov 21, 2015, shares of The Travelers Companies, Inc . TRV hit a new 52-week high of $116.48, driven by better-than-expected third-quarter 2015 results. With about 1.7 million shares exchanging hands in the last trading session, the stock finally closed at $115.83. Year to date, the stock has returned 9.42%, comparing favorably with 1.7% by the S&P 500.

Travelers' operating earnings of $2.61 per share in the third quarter surpassed the Zacks Consensus Estimate as well as improved year over year. The sound performance came on the back of higher net investment income and lower catastrophe losses. With respect to surprise trends, the Zacks Rank #2 (Buy) property and casualty insurer delivered positive surprise in three of the last four quarters with an average beat of 17.91%.

Revenues also fared well on both counts.

Net written premiums hit a record in the third quarter, driven by the inclusion of The Dominion of Canada General Insurance Company and growth in domestic insurance business. Strong private equity returns fueled a 7% rise in net investment income in the quarter.

The company continues to witness higher-than-expected written rate gains, exceeding loss cost trends across all segments.

Travelers also remains focused on enhancing its shareholders' value. To that end, the company returned $937 million in the third quarter. These include $751 million spent for buying back 8.1 million shares and a dividend of 55 cents per share. The company has $2.5 billion remaining under its authorization.

A sturdy third-quarter performance drove the Zacks Consensus Estimate higher as estimates were revised upward in the last 30 days. The same increased 1.1% to $10.41 for 2015 and 0.7% to $9.79 for 2016. The expected long-term earnings growth rate currently stands at 7.7%.

Other Stocks to Consider

Investors interested in the property and casualty insurance can consider other stocks like Aspen Insurance Holdings Ltd. AHL , Cincinnati Financial Corp. CINF and RLI Corp. RLI . All these stocks sport a Zacks Rank #1 (Strong Buy).

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RLI CORP (RLI): Free Stock Analysis Report

TRAVELERS COS (TRV): Free Stock Analysis Report

CINCINNATI FINL (CINF): Free Stock Analysis Report

ASPEN INS HLDGS (AHL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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