Is Hartford Stock Still Good Value Post 39% Rally Last Year?

Hartford Financial’s stock (NYSE: HIG) has gained approximately 39% since early 2024, compared to the 23% increase in the S&P500 index over the same period. In comparison, Hartford Financial’s peer Travelers (NYSE: TRV) stock was up about 30% over the same period. So what are some of the trends driving Hartford’s stock higher?

Hartford Financial Services specializes in property and casualty insurance and asset management services. HIG’s Q3 results were better than expected with earnings coming in at $2.53 per share, while Hartford Financial’s revenues rose about 11% year-over-year to $4.7 billion. Hartford has been witnessing strong underwriting gains at its property and casualty business while seeing stronger returns on its investment portfolio. Over the quarter, the company saw its property and casualty premiums rise 10% driven by commercial lines as well as personal lines premium growth. Hartford’s net investment income rose 10% to $659 million.  Relatively high interest rates over the last year have helped insurers realize better yields from their fixed-income portfolios, while the recent stock market rally has also helped returns to an extent.

HIG is one of a handful of stocks that have increased their value in each of the last 4 years, but that still wasn’t enough for it to consistently beat the market. Returns for the stock were 44% in 2021, 12% in 2022, 9% in 2023, and 39% in 2024. While HIG stock has seen strong growth over recent years, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has provided better returns with less risk versus the benchmark S&P 500 index over the last four year period; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment around rate cuts and multiple wars, is HIG stock attractive at current levels?

We have a $117 price estimate for Hartford stock, which is about 7% ahead of the current market price. See our analysis of Hartford Financial’s valuation for a closer look at what’s driving our estimate for the company. There are a couple of trends that could support HIG stock in the near term. The election of Donald Trump to the U.S. presidency could benefit insurers like Hartford, as potentially lower regulatory burden and tax reductions could improve profitability. The company has also been boosting its shareholder returns, with the board authorizing a $3.3 billion share repurchase program in 2024. This could boost per share earnings. Hartford’s valuations are also reasonable. The book value per diluted share for the stock stands at about $63 meaning that the stock trades at about 1.7x its book value, which is reasonable compared to peers.

[1] Returns as of 1/6/2025
[2] Cumulative total returns since the end of 2016

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