Analyzing Travelers Companies (TRV) & Allstate (ALL)

Travelers Companies (NYSE: TRV) and Allstate (NYSE:ALL) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

78.5% of Travelers Companies shares are held by institutional investors. Comparatively, 76.4% of Allstate shares are held by institutional investors. 0.8% of Travelers Companies shares are held by company insiders. Comparatively, 1.6% of Allstate shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Travelers Companies and Allstate’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Travelers Companies $27.63 billion 1.33 $3.01 billion $8.61 15.65
Allstate $36.53 billion 1.00 $1.88 billion $7.20 14.18

Travelers Companies has higher earnings, but lower revenue than Allstate. Allstate is trading at a lower price-to-earnings ratio than Travelers Companies, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Travelers Companies has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Allstate has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Dividends

Travelers Companies pays an annual dividend of $2.88 per share and has a dividend yield of 2.1%. Allstate pays an annual dividend of $1.48 per share and has a dividend yield of 1.4%. Travelers Companies pays out 33.4% of its earnings in the form of a dividend. Allstate pays out 20.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Travelers Companies has increased its dividend for 7 consecutive years and Allstate has increased its dividend for 9 consecutive years.

Profitability

This table compares Travelers Companies and Allstate’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Travelers Companies 8.56% 9.87% 2.28%
Allstate 7.32% 13.11% 2.32%

Analyst Recommendations

This is a summary of current ratings and price targets for Travelers Companies and Allstate, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Travelers Companies 2 6 7 0 2.33
Allstate 2 7 3 0 2.08

Travelers Companies currently has a consensus price target of $133.11, indicating a potential downside of 1.20%. Allstate has a consensus price target of $94.50, indicating a potential downside of 7.45%. Given Travelers Companies’ stronger consensus rating and higher possible upside, equities analysts clearly believe Travelers Companies is more favorable than Allstate.

Summary

Travelers Companies beats Allstate on 11 of the 17 factors compared between the two stocks.

About Travelers Companies

The Travelers Companies, Inc. is a holding company. The Company’s segments include Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Through its subsidiaries, it provides commercial and personal property and casualty insurance products and services. The Business and International Insurance segment offers property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil and throughout other parts of the world. The Bond & Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The Personal Insurance segment writes a range of property and casualty insurance covering individuals’ personal risks.

About Allstate

The Allstate Corporation (Allstate) is a holding company for Allstate Insurance Company. The Company’s business is conducted principally through Allstate Insurance Company, Allstate Life Insurance Company and other subsidiaries. It is engaged in the property-liability insurance business and the life insurance, retirement and investment products business. Its segments include Allstate Protection, Allstate Financial, Discontinued Lines and Coverages, and Corporate and Other. The Allstate Protection segment sells private passenger auto, homeowners, and other property-liability insurance products through agencies and directly through contact centers and the Internet. The Allstate Financial segment sells life insurance and voluntary accident and health insurance products. The Corporate and Other segment consists of holding company activities and certain non-insurance operations. Its Discontinued Lines and Coverages segment includes results from property-liability insurance coverage.

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