Loews Corporation (L): Invest in This Conglomerate or Its Holdings?

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Loews CorporationLoews Corporation (NYSE:L) is considered a diversified holding company, with a high concentration in the insurance and oil/gas industry. After recently releasing its 13F filing, I decided to check up on Loews top three holdings. Loews key subsidiaries includes Cna Financial Corp (NYSE:CNA), Boardwalk Pipeline Partners, LP (NYSE:BWP) and Diamond Offshore Drilling Inc (NYSE:DO) .

Loews’ segments

Cna Financial Corp (NYSE:CNA) is a property-casualty insurer in the U.S., providing standard commercial lines, specialty lines, surety, marine and other property and casualty coverage, as well as life and group insurance coverage. Loews owns nearly 90% of the company and it contributes some 65% of revenue.
Diamond Offshore Drilling Inc (NYSE:DO) owns and operates 49 offshore-drilling rigs on a contractual basis for oil and gas exploration and production companies. Loews currently owns a 50% stake in Diamond, which accounts for 21% of its revenue.
Boardwalk Pipeline Partners, LP (NYSE:BWP) is 40.5% owned by Loews Corporation (NYSE:L). Boardwalk is engaged in the operation of interstate natural-gas pipeline systems. Loews derived 8% of its 2012 revenue from Boardwalk.
HighMount Exploration & Production is engaged in natural gas and oil exploration and production operations located in the Permian Basin in Texas, the Antrim Shale in Michigan and the Black Warrior Basin in Alabama. The oil/gas company contributes 2% to revenue.
Loews Corporation (NYSE:L) Hotels, a wholly owned subsidiary that owns and operates 18 hotels in the U.S. and Canada, generated 2.7% of full-year 2012 revenue.
Loews Corporation (NYSE:L) hopes to strengthen its hotel segment by adding more hotels to its portfolio in order to take the count from 18 to more than 30 in the next three-to-five years. Part of this includes an agreement with CIM Group to purchase Renaissance Hotel & Spa in Hollywood, Calif. Loews Hotels also recently bought Madison Hotel in Washington, D.C. from Jamestown Properties.
Lowes’ subsidiaries

Cna Financial Corp (NYSE:CNA) is the 14th-largest U.S. property and casualty company based on written premiums. From a valuation perspective, CNA trades a 0.7 times book value versus an industry average of 1.0. Its property and casualty rates are showing signs of improvement and CNA also boasts $1.5 billion in cash, compared to debt of approximately $2.6 billion.
Boardwalk Pipeline Partners, LP (NYSE:BWP) is a master limited partnership engaged through its subsidiaries, Texas Gas Transmission and Gulf South Pipeline. Recent news for Boardwalk involves its foray into the natural-gas liquids business, thanks to a joint venture with Boardwalk Pipeline.
Natural gas appears to be an attractive energy choice given its relative fuel efficiency, low emissions, quick construction timelines and low capital costs. Boardwalk also acquired Boardwalk Louisiana Midstream and is expanding in the Southeast market and in the Eagle Ford, which is expected to bring $1.2 billion of new assets to Boardwalk.
The outlook for oil and gas storage and transportation is positive, with fee-based pipeline and terminal operators expected to expand thanks to U.S. GDP growth in 2013. S&P projects GDP growth of 2.7% for 2013 and 3.1% for 2014 versus the 2.2% growth in 2012. Boardwalk also trades relatively cheaply at 1.8 times book value compared to the industry average of 2.1.
Diamond Offshore Drilling Inc (NYSE:DO) Drilling has a focus on deepwater drilling, with 44 mobile offshore drilling rigs: 37 floaters (including 12 ultra-deepwater units, seven deepwater units and 18 mid-water capable floaters), and seven jackup rigs. These rig counts include four new ultra-deepwater floaters under construction, as well as two deepwater floaters under construction, with all six units due for delivery in 2013 to 2014.
As well, its rigs are located in a number of offshore basins around the world, including the Gulf of Mexico, the North Sea, South America, Africa, Australia and Southeast Asia. Another encouraging factor is that Diamond has heavy international diversification, with 94% of 2012 revenue being derived from outside the U.S. The big initiative for Diamond is to increase its footprint in emerging markets, namely Brazil, Australia and West Africa.
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