If You Invested $1000 in The Hartford 10 Years Ago, This Is How Much You'd Have Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in The Hartford (HIG) ten years ago? It may not have been easy to hold on to HIG for all that time, but if you did, how much would your investment be worth today?
The Hartford's Business In-Depth
With that in mind, let's take a look at The Hartford's main business drivers.
Founded in 1810 and headquartered in Hartford, CT, The Hartford Financial Services Group Inc. is one of the major multi-line insurance and investment companies in the country, providing investment products, group life and group disability insurance, property and casualty (P&C) insurance and mutual funds in the U.S.
Hartford Financial strives to improve its position as a market leader within the financial services industry in the United States, United Kingdom, continental Europe and other regions.
It sells various innovative products through multiple distribution channels to individuals and businesses and is considered a leading property and casualty and employee group benefits insurer. Also, the company’s commitment to boost investment in the energy transition will likely bring more environment-friendly energy investors onboard. Hartford Financial is expected to invest $2.5 billion in multiple sources that are advancing energy transition over the next five years. Betting for a future with sustainable energy bodes well for the company.
The company reports through the following segments:
The Commercial Lines segment (50.7% of the total revenue in 2021), formerly known as Property & Casualty Commercial offers workers’ compensation, property, automobile, liability, umbrella, marine and livestock coverages mainly in the U.S. The segment also offers various customized insurance products and risk management services including automobile, general liability, professional liability, bond, and specialty casualty coverages.
The Personal Lines (14.5%), formerly known as the Consumer Markets segment offers automobile, homeowners and personal umbrella coverages to individuals across the United States, including a special program designed exclusively for members of AARP. The P & C Other Ops reported 0.4% of 2020 total revenues. It has two other reporting segments, namely Group Benefits (28.4%) and Hartford Funds (5.4%), as well as a Corporate category (0.6%).
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in The Hartford ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in August 2012 would be worth $3,886.27, or a 288.63% gain, as of August 12, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 199.26% and the price of gold went up 5.83% over the same time frame.
Analysts are forecasting more upside for HIG too.
Hartford Financial’s second-quarter earnings beat estimates. It is gaining from lower COVID-related losses, an improved Commercial Lines loss ratio and a rise in earned premiums. The company’s divestitures are enhancing financial flexibility by freeing up more capital. It is expected to widen its underwriting strength in product capital appreciations and measures to de-risk its balance sheet, which has increased its financial strength. It has a prudent capital management strategy in place. The company’s cost reduction initiatives are likely to aid margins in the days ahead. Shares of the company have outperformed its industry in a year. However, being a P&C insurer, it is exposed to catastrophe losses, which impact underwriting results. The weak Personal Lines segment bothers. As such, the stock warrants a cautious stance.
Over the past four weeks, shares have rallied 9.77%, and there have been 5 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report
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