As 2011 comes to a close, it's a great time to look back at what happened to the stocks that interest you. By making sure you know the important things that a company accomplished -- as well as the setbacks it experienced -- you can make a better decision about whether it's a smart investment for your portfolio.
Today, let's take a look at Travelers
Stats on Travelers
|Year-to-Date Stock Return||9.3%|
|Market Cap||$23.8 billion|
|1-Year Revenue Growth||0.9%|
|1-Year Profit Growth||(52.8%)|
|P&C Combined Ratio, 2011 YTD||108.2%|
Source: S&P Capital IQ.
How did Travelers rise this year?
Travelers provides property and casualty insurance to individuals, businesses, and government entities. That's been a terrible place to be in 2011, as losses from a number of adverse events have added up to put a big hurt on insurance company earnings. Most of Travelers' sales come from the U.S., although it does a small amount of business in the U.K., Ireland, and Canada.
Yet Travelers has fared better than many companies. Allstate
Still, it'll take some time for Travelers to regain its footing. For its most recent quarter, Travelers' combined ratio jumped to 104.5%, meaning that losses and expenses exceeded premium income. Premiums rose during the quarter, but net income was slashed by two-thirds.
The good news going forward, though, is that bad years tend to support higher premiums in future years, which should help Travelers regain its lost profits over time. That's probably why shareholders took this year's catastrophe losses in stride rather than unfairly punishing Travelers' share price.
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