The Travelers logo on the company’s office building in Hartford, Connecticut
With the year almost over, we’re taking a look at all 30 stocks in the Dow Jones Industrial Average, starting with the worst performers—
Walgreens Boots Alliance
—and working our way up to the highest-flying stock in the benchmark—Apple. The ranking may shift before the close of 2020 trading, but the stories behind the stocks shouldn’t.
(TRV) handled its share of hits from the unusually active Atlantic hurricane season not to mention California wildfires and pandemic-related business interruptions this year.
Shares of the property and casualty insurer barely budged, but things are looking up for 2021.
The Dow’s smallest company with a $35 billion market value is basically flat for the year. Shares are up 1% compared to the 6.3% gain in the Dow Jones Industrial Average and a 15.4% gain in the S&P 500 index.
The stock tumbled 45% in the first three months of the year and hit a low of $76.99 in mid-March, when Covid-19 forced widespread business shutdowns. They have since climbed back to $139.
Pandemic-forced shutdowns led to elevated claims from business interruption lawsuits. The property and casualty insurers have been fighting these suits in court, mostly prevailing so far by arguing the policies were intended for interruptions from fire or other events, not viruses.
Full-year 2020 earnings per share are expected to be $8.71, down from $9.60 last year, according to FactSet. Revenue through September was $23.5 billion, about the same as the comparable period in 2019, even though Travelers notched nearly $400 million from catastrophe losses.
Several analysts recently raised their price targets on the stock, and estimates are inching higher for next year. Now that some parts of the economy are bouncing back, new business and retention of existing customers are expected to increase. Auto insurance policy holders are driving less—translating to fewer claims—and Travelers is benefitting from higher premiums on its products.
Capital levels weren’t materially affected by the Covid-related shutdowns, either. Travelers returned about $215 million a quarter in dividends this year, with a current yield of 2.5%.
In December, Travelers announced it was buying a digital insurance agency InsuraMatch, developed by Plymouth Rock Group, for undisclosed terms. That will help Travelers expand its products for individuals, including auto, home, boat and motorcycle insurance.
Write to Liz Moyer at Liz.Moyer@barrons.com