Since we looked at Travelers last year, the company has regained the point it lost from 2011 to 2012, as its earnings rose and reduced its valuation multiple. The stock has soared over the past year, rising more than 40% in a much more favorable environment.
Throughout much of the past year, Travelers enjoyed a nice rebound from a horrible 2011, in which damage from Hurricane Irene hit the company hard. Through the first three quarters of 2012, losses were just a third of their corresponding levels in 2011, and Travelers was able to improve its premium pricing in response to the storm and thereby boost profits.
At first, investors expected Hurricane Sandy to end Travelers’ good 2012. But when the final results came in, they weren’t as bad for insurance companies as some had feared. The Allstate Corporation (NYSE:ALL), which was hit hardest by the storm, turned a substantial profit, even though analysts had expected a quarterly loss due to Sandy. For Travelers Companies Inc (NYSE:TRV)’s part, although profits got cut in half, the insurer beat estimates by a whopping $0.60 per share.
For retirees and other conservative investors, Travelers has managed to thrive despite the challenging environment of big losses and poor yields on its holdings of fixed-income investments. With a reasonable dividend yield that has been growing steadily in recent years, Travelers Companies Inc (NYSE:TRV) deserves a close look from investors seeking to add financial exposure to their retirement portfolios.
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The article Will Travelers Help You Retire Rich? originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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