Comparing The Hanover Insurance Group (NYSE:THG) and Tokio Marine (OTCMKTS:TKOMY)

The Hanover Insurance Group (NYSE:THGGet Rating) and Tokio Marine (OTCMKTS:TKOMYGet Rating) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for The Hanover Insurance Group and Tokio Marine, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Hanover Insurance Group 0 3 1 0 2.25
Tokio Marine 0 0 0 0 N/A

The Hanover Insurance Group currently has a consensus target price of $151.50, indicating a potential upside of 13.50%. Given The Hanover Insurance Group’s higher probable upside, equities analysts clearly believe The Hanover Insurance Group is more favorable than Tokio Marine.

Volatility and Risk

The Hanover Insurance Group has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Tokio Marine has a beta of -0.74, suggesting that its stock price is 174% less volatile than the S&P 500.

Profitability

This table compares The Hanover Insurance Group and Tokio Marine’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Hanover Insurance Group 5.42% 13.26% 2.59%
Tokio Marine 3.91% 6.12% 0.88%

Dividends

The Hanover Insurance Group pays an annual dividend of $3.24 per share and has a dividend yield of 2.4%. Tokio Marine pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. The Hanover Insurance Group pays out 40.1% of its earnings in the form of a dividend. Tokio Marine pays out -30.6% 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. The Hanover Insurance Group has increased its dividend for 18 consecutive years. The Hanover Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares The Hanover Insurance Group and Tokio Marine’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Hanover Insurance Group $5.23 billion 0.91 $418.70 million $8.07 16.54
Tokio Marine $52.23 billion 2.50 $3.74 billion ($0.65) -32.58

Tokio Marine has higher revenue and earnings than The Hanover Insurance Group. Tokio Marine is trading at a lower price-to-earnings ratio than The Hanover Insurance Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

86.4% of The Hanover Insurance Group shares are held by institutional investors. Comparatively, 0.0% of Tokio Marine shares are held by institutional investors. 2.5% of The Hanover Insurance Group 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.

Summary

The Hanover Insurance Group beats Tokio Marine on 11 of the 15 factors compared between the two stocks.

About The Hanover Insurance Group

(Get Rating)

The Hanover Insurance Group, Inc. is a holding company that engages in the provision of property and casualty products and services. It operates through the following segments: Commercial Lines, Personal Lines and Other. The Commercial Lines segment includes commercial multiple peril, commercial automobile, workers compensation and other commercial coverage, such as specialty program business, inland marine, management and professional liability and surety. The Personal Lines segment involves personal automobile, homeowners and other personal coverage. The Other segment operates through Opus Investment Management, Inc. The company was founded in 1852 and is headquartered in Worcester, MA.

About Tokio Marine

(Get Rating)

Tokio Marine Holdings, Inc., together with its subsidiaries, engages in non-life and life insurance, international insurance, and financial and general businesses worldwide. The company provides business, fire, Internet and mobile, rental housing, and natural catastrophe risk insurance services, as well as insurance for retail and corporate fields. It also provides property investment, insurance agency and risk consulting, human resource, in-home care and nursing care information, healthcare/medical, call center, and real estate-related services. Tokio Marine Holdings, Inc. serves individuals, small to medium sized non-profit organizations, schools, or churches. The company was formerly known as Millea Holdings, Inc. and changed its name to Tokio Marine Holdings, Inc. in 2008. Tokio Marine Holdings, Inc. was founded in 1879 and is headquartered in Tokyo, Japan.

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