The Travelers Companies, Inc.
The Travelers Companies, Inc. Fundamental Analysis
The Travelers Companies, Inc. (TRV) shows strong financial fundamentals with a PE ratio of 10.61, profit margin of 12.88%, and ROE of 20.58%. The company generates $49.4B in annual revenue with strong year-over-year growth of 12.22%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 75.2/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TRV's fundamental strength across five key dimensions:
Efficiency Score
WeakTRV struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTRV trades at attractive valuation levels.
Growth Score
ExcellentTRV delivers strong and consistent growth momentum.
Financial Health Score
ModerateTRV shows balanced financial health with some risks.
Profitability Score
ModerateTRV maintains healthy but balanced margins.
Key Financial Metrics
Is TRV Expensive or Cheap?
P/E Ratio
TRV trades at 10.61 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, TRV's PEG of 1.29 indicates fair valuation.
Price to Book
The market values The Travelers Companies, Inc. at 2.03 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.64 times EBITDA. This is generally considered low.
How Well Does TRV Make Money?
Net Profit Margin
For every $100 in sales, The Travelers Companies, Inc. keeps $12.88 as profit after all expenses.
Operating Margin
Core operations generate 15.97 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.58 in profit for every $100 of shareholder equity.
ROA
The Travelers Companies, Inc. generates $4.38 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Travelers Companies, Inc. produces operating cash flow of $10.74B, showing steady but balanced cash generation.
Free Cash Flow
The Travelers Companies, Inc. generates strong free cash flow of $8.02B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $35.96 in free cash annually.
FCF Yield
TRV converts 11.69% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
10.61
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.29
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.03
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.38
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.28
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.23
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.15
vs 25 benchmark
How TRV Stacks Against Its Sector Peers
| Metric | TRV Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 10.61 | 18.86 | Better (Cheaper) |
| ROE | 20.58% | 847.00% | Weak |
| Net Margin | 12.88% | 4202.00% | Weak |
| Debt/Equity | 0.28 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 0.23 | 667.17 | Weak Liquidity |
| ROA | 4.38% | -21543.00% (disorted) | Weak |
TRV outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Travelers Companies, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
67.65%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
117.41%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
98.80%
Industry Style: Value, Dividend, Cyclical
High Growth