Bull of the Day: Hanover Insurance Group (THG)

Looking for a place to hide out in this uncertainty? The Hanover Insurance Group, Inc. THG is a Zacks #1 (Strong Buy) which had a record 2024 and is expected to see further growth in 2025.

The Hanover Insurance Group is the holding company for several property and casualty insurance companies. With a market cap of $6.2 billion, it is one of the largest insurance businesses in the United States.

It offers standard and specialized insurance protection for small and mid-sized businesses as well as for homes, autos, and other personal items.

Hanover's Perfect 5-Year Earnings Surprise Track Record Remains Intact in Q4 2024

On Feb 4, 2025, The Hanover Insurance Group reported its fourth quarter and full year 2024 results. It easily beat the Zacks Consensus Estimate for the quarter reporting $5.32, or $1.87 higher than the Zacks Consensus of $3.45.

This earnings surprise extended the company's amazing earnings surprise track record.

The Hanover Insurance Group has not missed on earnings during the last 5 years, which included the pandemic. That's impressive.

It was a record quarter, and full year.

"We posted full-year operating earnings of $13.34 per share, our highest ever, while we improved our ex-CAT combined ratio by 2.9 points, to 88.4%," said Jeffrey M. Farber, CFO.

Hanover Increased the Dividend Again

The company is shareholder friendly. In the fourth quarter, Hanover resumed share buybacks. It repurchased about 170,000 shares for $26.7 million leaving it approximately $303 million under the existing share repurchase program.

Hanover's Board of Directors also raised the quarterly dividend by 5.9% to $0.90 per share. It has increased its dividend 20 years in a row. The dividend is now yielding 2.1%.

Analysts Are Bullish About Hanover in 2025

With market uncertainty roiling the stock market in 2025, investors might want to consider an insurance company. The analysts are bullish about Hanover for 2025 and 2026.

1 estimate has been revised higher in the last 30 days, and 4 in the last 60 days, for 2025. It has pushed the Zacks Consensus Estimate up to $14.47 from $14.12 over the last month. That's earnings growth of 8.5%.

They are equally bullish about 2026. 1 estimate has been revised higher in the last 30 days, and 4 higher in the last 60 days. The Zacks Consensus is calling for $16.05, which is another 10.9% earnings growth.

Here's what it looks like on the 5-Year Price and Consensus Chart.

Hanover Shares Buck the Bearish Trend: Is It a Steal?

Up until the tariffs were announced, shares of Hanover had been rallying. They are still up 3.4% year-to-date which is outperforming the S&P 500.

Hanover is cheap. It trades with a forward price-to-earnings (P/E) ratio of just 11.9.

It will report first quarter 2025 earnings on Apr 30, 2025.

For investors looking for a cheap, growth stock, with a strong history of a dividend, The Hanover Insurance Group is a stock to keep on the short list.

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This article originally published on Zacks Investment Research (zacks.com).

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