Intrinsic value of Travelers Cos. - TRV

Previous Close

$133.16

  Intrinsic Value

$343.60

stock screener

  Rating & Target

str. buy

+158%

Previous close

$133.16

 
Intrinsic value

$343.60

 
Up/down potential

+158%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as TRV.

We calculate the intrinsic value of TRV stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 36.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.93
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
  5.02
  5.02
  5.02
  5.02
  5.02
  5.01
  5.01
  5.01
  5.01
  5.01
Revenue, $m
  0
  29,092
  30,599
  32,178
  33,834
  35,570
  37,391
  39,300
  41,303
  43,404
  45,607
  47,920
  50,346
  52,891
  55,563
  58,366
  61,309
  64,397
  67,638
  71,040
  74,612
  78,360
  82,295
  86,426
  90,763
  95,316
  100,095
  105,113
  110,381
  115,911
  121,718
Variable operating expenses, $m
 
  23,546
  24,747
  26,006
  27,326
  28,710
  30,161
  31,682
  33,279
  34,953
  36,710
  38,194
  40,128
  42,157
  44,287
  46,521
  48,866
  51,328
  53,911
  56,623
  59,470
  62,457
  65,594
  68,887
  72,343
  75,972
  79,781
  83,781
  87,979
  92,388
  97,016
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  23,238
  23,546
  24,747
  26,006
  27,326
  28,710
  30,161
  31,682
  33,279
  34,953
  36,710
  38,194
  40,128
  42,157
  44,287
  46,521
  48,866
  51,328
  53,911
  56,623
  59,470
  62,457
  65,594
  68,887
  72,343
  75,972
  79,781
  83,781
  87,979
  92,388
  97,016
Operating income, $m
  4,416
  5,546
  5,852
  6,172
  6,509
  6,861
  7,230
  7,618
  8,024
  8,451
  8,898
  9,725
  10,217
  10,734
  11,276
  11,845
  12,442
  13,069
  13,727
  14,417
  15,142
  15,903
  16,702
  17,540
  18,420
  19,344
  20,314
  21,332
  22,401
  23,524
  24,702
EBITDA, $m
  9,227
  5,962
  6,271
  6,595
  6,934
  7,290
  7,663
  8,054
  8,465
  8,895
  9,347
  9,821
  10,318
  10,840
  11,387
  11,962
  12,565
  13,198
  13,862
  14,559
  15,291
  16,060
  16,866
  17,713
  18,602
  19,535
  20,514
  21,542
  22,622
  23,756
  24,946
Interest expense (income), $m
  358
  360
  580
  815
  1,061
  1,319
  1,590
  1,874
  2,171
  2,483
  2,811
  3,154
  3,514
  3,892
  4,289
  4,705
  5,142
  5,601
  6,082
  6,587
  7,117
  7,674
  8,258
  8,871
  9,515
  10,190
  10,900
  11,645
  12,426
  13,247
  14,109
Earnings before tax, $m
  4,053
  5,186
  5,272
  5,357
  5,447
  5,541
  5,640
  5,744
  5,853
  5,967
  6,087
  6,571
  6,703
  6,842
  6,987
  7,140
  7,300
  7,468
  7,645
  7,830
  8,025
  8,229
  8,444
  8,669
  8,905
  9,154
  9,414
  9,688
  9,975
  10,276
  10,593
Tax expense, $m
  1,039
  1,400
  1,423
  1,446
  1,471
  1,496
  1,523
  1,551
  1,580
  1,611
  1,644
  1,774
  1,810
  1,847
  1,887
  1,928
  1,971
  2,016
  2,064
  2,114
  2,167
  2,222
  2,280
  2,341
  2,404
  2,471
  2,542
  2,616
  2,693
  2,775
  2,860
Net income, $m
  3,014
  3,786
  3,848
  3,911
  3,976
  4,045
  4,117
  4,193
  4,273
  4,356
  4,444
  4,797
  4,893
  4,994
  5,101
  5,212
  5,329
  5,452
  5,581
  5,716
  5,858
  6,007
  6,164
  6,328
  6,501
  6,682
  6,872
  7,072
  7,282
  7,502
  7,733

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  100,245
  105,406
  110,866
  116,589
  122,588
  128,878
  135,475
  142,392
  149,648
  157,259
  165,244
  173,622
  182,412
  191,635
  201,314
  211,472
  222,133
  233,322
  245,066
  257,393
  270,332
  283,914
  298,172
  313,139
  328,852
  345,347
  362,664
  380,844
  399,930
  419,969
  441,007
Adjusted assets (=assets-cash), $m
  100,245
  105,406
  110,866
  116,589
  122,588
  128,878
  135,475
  142,392
  149,648
  157,259
  165,244
  173,622
  182,412
  191,635
  201,314
  211,472
  222,133
  233,322
  245,066
  257,393
  270,332
  283,914
  298,172
  313,139
  328,852
  345,347
  362,664
  380,844
  399,930
  419,969
  441,007
Revenue / Adjusted assets
  0.000
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
Average production assets, $m
  274
  291
  306
  322
  338
  356
  374
  393
  413
  434
  456
  479
  503
  529
  556
  584
  613
  644
  676
  710
  746
  784
  823
  864
  908
  953
  1,001
  1,051
  1,104
  1,159
  1,217
Working capital, $m
  0
  582
  612
  644
  677
  711
  748
  786
  826
  868
  912
  958
  1,007
  1,058
  1,111
  1,167
  1,226
  1,288
  1,353
  1,421
  1,492
  1,567
  1,646
  1,729
  1,815
  1,906
  2,002
  2,102
  2,208
  2,318
  2,434
Total debt, $m
  6,437
  10,365
  14,558
  18,953
  23,561
  28,392
  33,457
  38,770
  44,343
  50,188
  56,321
  62,754
  69,505
  76,589
  84,023
  91,824
  100,011
  108,604
  117,624
  127,091
  137,028
  147,459
  158,409
  169,904
  181,971
  194,639
  207,939
  221,901
  236,560
  251,949
  268,106
Total liabilities, $m
  77,024
  80,952
  85,145
  89,540
  94,148
  98,979
  104,044
  109,357
  114,930
  120,775
  126,908
  133,341
  140,092
  147,176
  154,610
  162,411
  170,598
  179,191
  188,211
  197,678
  207,615
  218,046
  228,996
  240,491
  252,558
  265,226
  278,526
  292,488
  307,147
  322,536
  338,693
Total equity, $m
  23,221
  24,454
  25,721
  27,049
  28,440
  29,900
  31,430
  33,035
  34,718
  36,484
  38,337
  40,280
  42,320
  44,459
  46,705
  49,062
  51,535
  54,131
  56,855
  59,715
  62,717
  65,868
  69,176
  72,648
  76,294
  80,120
  84,138
  88,356
  92,784
  97,433
  102,314
Total liabilities and equity, $m
  100,245
  105,406
  110,866
  116,589
  122,588
  128,879
  135,474
  142,392
  149,648
  157,259
  165,245
  173,621
  182,412
  191,635
  201,315
  211,473
  222,133
  233,322
  245,066
  257,393
  270,332
  283,914
  298,172
  313,139
  328,852
  345,346
  362,664
  380,844
  399,931
  419,969
  441,007
Debt-to-equity ratio
  0.277
  0.420
  0.570
  0.700
  0.830
  0.950
  1.060
  1.170
  1.280
  1.380
  1.470
  1.560
  1.640
  1.720
  1.800
  1.870
  1.940
  2.010
  2.070
  2.130
  2.180
  2.240
  2.290
  2.340
  2.390
  2.430
  2.470
  2.510
  2.550
  2.590
  2.620
Adjusted equity ratio
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,014
  3,786
  3,848
  3,911
  3,976
  4,045
  4,117
  4,193
  4,273
  4,356
  4,444
  4,797
  4,893
  4,994
  5,101
  5,212
  5,329
  5,452
  5,581
  5,716
  5,858
  6,007
  6,164
  6,328
  6,501
  6,682
  6,872
  7,072
  7,282
  7,502
  7,733
Depreciation, amort., depletion, $m
  4,811
  416
  419
  422
  426
  429
  433
  437
  441
  445
  449
  96
  101
  106
  111
  117
  123
  129
  135
  142
  149
  157
  165
  173
  182
  191
  200
  210
  221
  232
  243
Funds from operations, $m
  701
  4,202
  4,267
  4,333
  4,402
  4,474
  4,550
  4,630
  4,713
  4,801
  4,893
  4,893
  4,994
  5,100
  5,212
  5,329
  5,452
  5,581
  5,716
  5,858
  6,007
  6,164
  6,329
  6,501
  6,682
  6,873
  7,072
  7,282
  7,502
  7,734
  7,976
Change in working capital, $m
  -3,501
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  49
  51
  53
  56
  59
  62
  65
  68
  71
  75
  79
  83
  87
  91
  96
  100
  105
  111
  116
Cash from operations, $m
  4,202
  4,173
  4,237
  4,302
  4,369
  4,440
  4,514
  4,592
  4,673
  4,759
  4,849
  4,847
  4,945
  5,049
  5,158
  5,273
  5,393
  5,519
  5,651
  5,790
  5,936
  6,089
  6,250
  6,419
  6,596
  6,782
  6,977
  7,182
  7,397
  7,623
  7,860
Maintenance CAPEX, $m
  0
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
  -123
  -129
  -135
  -142
  -149
  -157
  -165
  -173
  -182
  -191
  -200
  -210
  -221
  -232
New CAPEX, $m
  0
  -17
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -34
  -36
  -37
  -39
  -41
  -43
  -46
  -48
  -50
  -53
  -55
  -58
Cash from investing activities, $m
  -1,460
  -72
  -73
  -77
  -81
  -85
  -89
  -94
  -99
  -104
  -109
  -114
  -120
  -126
  -133
  -139
  -146
  -154
  -161
  -169
  -178
  -186
  -196
  -206
  -216
  -228
  -239
  -250
  -263
  -276
  -290
Free cash flow, $m
  2,742
  4,101
  4,164
  4,225
  4,288
  4,355
  4,425
  4,498
  4,575
  4,655
  4,740
  4,732
  4,825
  4,923
  5,026
  5,134
  5,247
  5,365
  5,490
  5,621
  5,758
  5,902
  6,054
  6,213
  6,379
  6,555
  6,738
  6,931
  7,134
  7,347
  7,570
Issuance/(repayment) of debt, $m
  91
  3,928
  4,193
  4,395
  4,608
  4,831
  5,066
  5,313
  5,572
  5,845
  6,132
  6,434
  6,751
  7,084
  7,434
  7,801
  8,187
  8,593
  9,019
  9,467
  9,937
  10,431
  10,950
  11,495
  12,067
  12,668
  13,299
  13,962
  14,658
  15,389
  16,157
Issuance/(repurchase) of shares, $m
  -2,140
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -2,049
  3,928
  4,193
  4,395
  4,608
  4,831
  5,066
  5,313
  5,572
  5,845
  6,132
  6,434
  6,751
  7,084
  7,434
  7,801
  8,187
  8,593
  9,019
  9,467
  9,937
  10,431
  10,950
  11,495
  12,067
  12,668
  13,299
  13,962
  14,658
  15,389
  16,157
Total cash flow (excl. dividends), $m
  684
  8,028
  8,357
  8,620
  8,896
  9,186
  9,490
  9,811
  10,147
  10,501
  10,872
  11,166
  11,576
  12,007
  12,460
  12,935
  13,434
  13,959
  14,509
  15,088
  15,696
  16,334
  17,004
  17,708
  18,447
  19,223
  20,038
  20,894
  21,793
  22,736
  23,727
Retained Cash Flow (-), $m
  377
  -1,233
  -1,267
  -1,328
  -1,392
  -1,459
  -1,530
  -1,605
  -1,683
  -1,766
  -1,852
  -1,944
  -2,039
  -2,140
  -2,246
  -2,357
  -2,473
  -2,596
  -2,725
  -2,860
  -3,002
  -3,151
  -3,308
  -3,472
  -3,645
  -3,827
  -4,018
  -4,218
  -4,428
  -4,649
  -4,881
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  6,795
  7,091
  7,292
  7,504
  7,726
  7,960
  8,206
  8,464
  8,735
  9,020
  9,222
  9,537
  9,867
  10,214
  10,578
  10,961
  11,363
  11,785
  12,228
  12,694
  13,183
  13,696
  14,235
  14,801
  15,396
  16,020
  16,676
  17,364
  18,087
  18,847
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  6,515
  6,491
  6,346
  6,179
  5,989
  5,777
  5,544
  5,290
  5,018
  4,729
  4,380
  4,070
  3,752
  3,429
  3,106
  2,785
  2,472
  2,170
  1,883
  1,613
  1,364
  1,136
  933
  754
  599
  467
  358
  269
  197
  142
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

The Travelers Companies, Inc. is a holding company. The Company's segments include Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Through its subsidiaries, it provides commercial and personal property and casualty insurance products and services. The Business and International Insurance segment offers property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil and throughout other parts of the world. The Bond & Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The Personal Insurance segment writes a range of property and casualty insurance covering individuals' personal risks.

FINANCIAL RATIOS  of  Travelers Cos. (TRV)

Valuation Ratios
P/E Ratio 12.4
Price to Sales 1.3
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 8.9
Price to Free Cash Flow 8.9
Growth Rates
Sales Growth Rate 2.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 25.4%
Total Debt to Equity 27.7%
Interest Coverage 12
Management Effectiveness
Return On Assets 3.3%
Ret/ On Assets - 3 Yr. Avg. 3.6%
Return On Total Capital 10.1%
Ret/ On T. Cap. - 3 Yr. Avg. 11.1%
Return On Equity 12.9%
Return On Equity - 3 Yr. Avg. 14%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 33.3%
EBITDA Margin - 3 Yr. Avg. 35.8%
Operating Margin 16%
Oper. Margin - 3 Yr. Avg. 18.4%
Pre-Tax Margin 14.7%
Pre-Tax Margin - 3 Yr. Avg. 17%
Net Profit Margin 10.9%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 25.6%
Eff/ Tax Rate - 3 Yr. Avg. 26.8%
Payout Ratio 25.1%

TRV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TRV stock intrinsic value calculation we used $27654 million for the last fiscal year's total revenue generated by Travelers Cos.. The default revenue input number comes from 2016 income statement of Travelers Cos.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TRV stock valuation model: a) initial revenue growth rate of 5.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TRV is calculated based on our internal credit rating of Travelers Cos., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Travelers Cos..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TRV stock the variable cost ratio is equal to 81%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TRV stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.6% for Travelers Cos..

Corporate tax rate of 27% is the nominal tax rate for Travelers Cos.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TRV stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TRV are equal to 1%.

Life of production assets of 0.8 years is the average useful life of capital assets used in Travelers Cos. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TRV is equal to 2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $23221 million for Travelers Cos. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 273.702 million for Travelers Cos. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Travelers Cos. at the current share price and the inputted number of shares is $36.4 billion.

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Financial statements of TRV
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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