Intrinsic value of Travelers Cos. - TRV

Previous Close

$133.32

  Intrinsic Value

$357.60

stock screener

  Rating & Target

str. buy

+168%

  Value-price divergence*

+29%

Previous close

$133.32

 
Intrinsic value

$357.60

 
Up/down potential

+168%

 
Rating

str. buy

 
Value-price divergence*

+29%

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

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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 37.1

 

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
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
Revenue, $m
  0
  29,286
  30,987
  32,762
  34,615
  36,551
  38,572
  40,685
  42,895
  45,206
  47,624
  50,154
  52,804
  55,578
  58,484
  61,529
  64,719
  68,063
  71,568
  75,244
  79,097
  83,139
  87,377
  91,824
  96,488
  101,382
  106,516
  111,904
  117,558
  123,491
  129,718
Variable operating expenses, $m
 
  23,700
  25,056
  26,471
  27,948
  29,491
  31,102
  32,787
  34,548
  36,389
  38,317
  39,976
  42,087
  44,299
  46,615
  49,042
  51,585
  54,250
  57,044
  59,973
  63,045
  66,266
  69,645
  73,188
  76,906
  80,807
  84,899
  89,194
  93,700
  98,429
  103,392
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
  23,700
  25,056
  26,471
  27,948
  29,491
  31,102
  32,787
  34,548
  36,389
  38,317
  39,976
  42,087
  44,299
  46,615
  49,042
  51,585
  54,250
  57,044
  59,973
  63,045
  66,266
  69,645
  73,188
  76,906
  80,807
  84,899
  89,194
  93,700
  98,429
  103,392
Operating income, $m
  4,416
  5,585
  5,931
  6,291
  6,667
  7,060
  7,470
  7,899
  8,347
  8,816
  9,307
  10,179
  10,716
  11,279
  11,869
  12,487
  13,134
  13,813
  14,525
  15,270
  16,052
  16,873
  17,733
  18,635
  19,582
  20,575
  21,617
  22,710
  23,858
  25,062
  26,326
EBITDA, $m
  9,227
  6,002
  6,351
  6,714
  7,094
  7,491
  7,905
  8,338
  8,791
  9,265
  9,760
  10,279
  10,822
  11,390
  11,986
  12,610
  13,264
  13,949
  14,668
  15,421
  16,211
  17,039
  17,908
  18,819
  19,775
  20,778
  21,830
  22,934
  24,093
  25,309
  26,585
Interest expense (income), $m
  358
  360
  611
  876
  1,152
  1,441
  1,743
  2,058
  2,387
  2,731
  3,091
  3,468
  3,862
  4,275
  4,708
  5,160
  5,635
  6,132
  6,653
  7,199
  7,772
  8,373
  9,002
  9,663
  10,356
  11,082
  11,845
  12,645
  13,485
  14,366
  15,290
Earnings before tax, $m
  4,053
  5,225
  5,320
  5,415
  5,515
  5,619
  5,727
  5,841
  5,960
  6,085
  6,216
  6,710
  6,854
  7,004
  7,161
  7,327
  7,500
  7,681
  7,871
  8,071
  8,280
  8,500
  8,731
  8,972
  9,226
  9,493
  9,772
  10,065
  10,373
  10,696
  11,035
Tax expense, $m
  1,039
  1,411
  1,436
  1,462
  1,489
  1,517
  1,546
  1,577
  1,609
  1,643
  1,678
  1,812
  1,851
  1,891
  1,934
  1,978
  2,025
  2,074
  2,125
  2,179
  2,236
  2,295
  2,357
  2,423
  2,491
  2,563
  2,638
  2,718
  2,801
  2,888
  2,980
Net income, $m
  3,014
  3,814
  3,884
  3,953
  4,026
  4,102
  4,181
  4,264
  4,351
  4,442
  4,537
  4,899
  5,003
  5,113
  5,228
  5,348
  5,475
  5,607
  5,746
  5,892
  6,045
  6,205
  6,373
  6,550
  6,735
  6,930
  7,134
  7,348
  7,572
  7,808
  8,056

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
  106,107
  112,272
  118,704
  125,418
  132,430
  139,755
  147,411
  155,416
  163,789
  172,550
  181,719
  191,318
  201,370
  211,899
  222,930
  234,490
  246,606
  259,306
  272,622
  286,584
  301,227
  316,585
  332,695
  349,595
  367,325
  385,929
  405,450
  425,935
  447,432
  469,993
Adjusted assets (=assets-cash), $m
  100,245
  106,107
  112,272
  118,704
  125,418
  132,430
  139,755
  147,411
  155,416
  163,789
  172,550
  181,719
  191,318
  201,370
  211,899
  222,930
  234,490
  246,606
  259,306
  272,622
  286,584
  301,227
  316,585
  332,695
  349,595
  367,325
  385,929
  405,450
  425,935
  447,432
  469,993
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
  293
  310
  328
  346
  366
  386
  407
  429
  452
  476
  502
  528
  556
  585
  615
  647
  681
  716
  752
  791
  831
  874
  918
  965
  1,014
  1,065
  1,119
  1,176
  1,235
  1,297
Working capital, $m
  0
  586
  620
  655
  692
  731
  771
  814
  858
  904
  952
  1,003
  1,056
  1,112
  1,170
  1,231
  1,294
  1,361
  1,431
  1,505
  1,582
  1,663
  1,748
  1,836
  1,930
  2,028
  2,130
  2,238
  2,351
  2,470
  2,594
Total debt, $m
  6,437
  10,903
  15,638
  20,578
  25,734
  31,119
  36,745
  42,625
  48,773
  55,203
  61,931
  68,973
  76,345
  84,065
  92,152
  100,624
  109,501
  118,806
  128,560
  138,786
  149,510
  160,755
  172,550
  184,922
  197,902
  211,519
  225,807
  240,799
  256,531
  273,041
  290,368
Total liabilities, $m
  77,024
  81,490
  86,225
  91,165
  96,321
  101,706
  107,332
  113,212
  119,360
  125,790
  132,518
  139,560
  146,932
  154,652
  162,739
  171,211
  180,088
  189,393
  199,147
  209,373
  220,097
  231,342
  243,137
  255,509
  268,489
  282,106
  296,394
  311,386
  327,118
  343,628
  360,955
Total equity, $m
  23,221
  24,617
  26,047
  27,539
  29,097
  30,724
  32,423
  34,199
  36,057
  37,999
  40,032
  42,159
  44,386
  46,718
  49,161
  51,720
  54,402
  57,212
  60,159
  63,248
  66,487
  69,885
  73,448
  77,185
  81,106
  85,220
  89,536
  94,064
  98,817
  103,804
  109,038
Total liabilities and equity, $m
  100,245
  106,107
  112,272
  118,704
  125,418
  132,430
  139,755
  147,411
  155,417
  163,789
  172,550
  181,719
  191,318
  201,370
  211,900
  222,931
  234,490
  246,605
  259,306
  272,621
  286,584
  301,227
  316,585
  332,694
  349,595
  367,326
  385,930
  405,450
  425,935
  447,432
  469,993
Debt-to-equity ratio
  0.277
  0.440
  0.600
  0.750
  0.880
  1.010
  1.130
  1.250
  1.350
  1.450
  1.550
  1.640
  1.720
  1.800
  1.870
  1.950
  2.010
  2.080
  2.140
  2.190
  2.250
  2.300
  2.350
  2.400
  2.440
  2.480
  2.520
  2.560
  2.600
  2.630
  2.660
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
  3,814
  3,884
  3,953
  4,026
  4,102
  4,181
  4,264
  4,351
  4,442
  4,537
  4,899
  5,003
  5,113
  5,228
  5,348
  5,475
  5,607
  5,746
  5,892
  6,045
  6,205
  6,373
  6,550
  6,735
  6,930
  7,134
  7,348
  7,572
  7,808
  8,056
Depreciation, amort., depletion, $m
  4,811
  417
  420
  424
  427
  431
  435
  439
  444
  448
  453
  100
  106
  111
  117
  123
  129
  136
  143
  150
  158
  166
  175
  184
  193
  203
  213
  224
  235
  247
  259
Funds from operations, $m
  701
  4,231
  4,304
  4,377
  4,453
  4,533
  4,616
  4,703
  4,795
  4,891
  4,991
  4,999
  5,109
  5,224
  5,345
  5,471
  5,604
  5,743
  5,889
  6,042
  6,203
  6,371
  6,548
  6,734
  6,928
  7,132
  7,347
  7,571
  7,808
  8,055
  8,315
Change in working capital, $m
  -3,501
  33
  34
  36
  37
  39
  40
  42
  44
  46
  48
  51
  53
  55
  58
  61
  64
  67
  70
  74
  77
  81
  85
  89
  93
  98
  103
  108
  113
  119
  125
Cash from operations, $m
  4,202
  4,198
  4,270
  4,341
  4,416
  4,494
  4,576
  4,661
  4,751
  4,844
  4,942
  4,948
  5,056
  5,169
  5,287
  5,411
  5,540
  5,676
  5,819
  5,969
  6,126
  6,291
  6,463
  6,645
  6,835
  7,034
  7,244
  7,464
  7,694
  7,937
  8,191
Maintenance CAPEX, $m
  0
  -55
  -59
  -62
  -66
  -69
  -73
  -77
  -81
  -86
  -90
  -95
  -100
  -106
  -111
  -117
  -123
  -129
  -136
  -143
  -150
  -158
  -166
  -175
  -184
  -193
  -203
  -213
  -224
  -235
  -247
New CAPEX, $m
  0
  -19
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -40
  -42
  -44
  -47
  -49
  -51
  -54
  -57
  -59
  -62
Cash from investing activities, $m
  -1,460
  -74
  -76
  -80
  -85
  -88
  -93
  -98
  -103
  -109
  -114
  -120
  -126
  -134
  -140
  -147
  -155
  -162
  -171
  -180
  -189
  -198
  -208
  -219
  -231
  -242
  -254
  -267
  -281
  -294
  -309
Free cash flow, $m
  2,742
  4,124
  4,194
  4,261
  4,332
  4,405
  4,482
  4,563
  4,647
  4,735
  4,828
  4,828
  4,929
  5,035
  5,146
  5,263
  5,385
  5,514
  5,648
  5,789
  5,937
  6,092
  6,255
  6,425
  6,605
  6,793
  6,990
  7,197
  7,414
  7,642
  7,882
Issuance/(repayment) of debt, $m
  91
  4,466
  4,735
  4,940
  5,156
  5,385
  5,626
  5,880
  6,148
  6,430
  6,728
  7,042
  7,372
  7,720
  8,086
  8,472
  8,878
  9,305
  9,754
  10,226
  10,723
  11,246
  11,795
  12,372
  12,979
  13,617
  14,288
  14,992
  15,732
  16,510
  17,327
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
  4,466
  4,735
  4,940
  5,156
  5,385
  5,626
  5,880
  6,148
  6,430
  6,728
  7,042
  7,372
  7,720
  8,086
  8,472
  8,878
  9,305
  9,754
  10,226
  10,723
  11,246
  11,795
  12,372
  12,979
  13,617
  14,288
  14,992
  15,732
  16,510
  17,327
Total cash flow (excl. dividends), $m
  684
  8,590
  8,929
  9,201
  9,488
  9,790
  10,108
  10,443
  10,795
  11,166
  11,556
  11,870
  12,301
  12,755
  13,233
  13,735
  14,263
  14,818
  15,402
  16,015
  16,660
  17,338
  18,050
  18,798
  19,584
  20,410
  21,277
  22,189
  23,146
  24,152
  25,209
Retained Cash Flow (-), $m
  377
  -1,396
  -1,430
  -1,492
  -1,558
  -1,627
  -1,699
  -1,776
  -1,857
  -1,943
  -2,032
  -2,127
  -2,227
  -2,332
  -2,443
  -2,559
  -2,682
  -2,811
  -2,946
  -3,089
  -3,239
  -3,397
  -3,563
  -3,737
  -3,921
  -4,114
  -4,316
  -4,529
  -4,752
  -4,987
  -5,234
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
 
  7,195
  7,498
  7,709
  7,931
  8,164
  8,409
  8,667
  8,938
  9,223
  9,523
  9,742
  10,074
  10,423
  10,790
  11,176
  11,581
  12,007
  12,455
  12,926
  13,421
  13,940
  14,487
  15,060
  15,663
  16,296
  16,961
  17,660
  18,394
  19,165
  19,974
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
 
  6,898
  6,865
  6,709
  6,530
  6,328
  6,103
  5,855
  5,586
  5,298
  4,993
  4,626
  4,299
  3,963
  3,622
  3,281
  2,943
  2,613
  2,294
  1,990
  1,705
  1,442
  1,202
  987
  798
  634
  495
  379
  285
  209
  150
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 5.9% 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 277.932 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 $37.1 billion.

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COMPANY NEWS

▶ Verizon and Travelers What you need to know on Thursday   [Oct-18-17 05:48PM  Yahoo Finance]
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▶ Travelers to Host Investor Day   [Sep-18-17 04:20PM  Business Wire]
▶ Stocks rally as world awaits iPhone news   [Sep-12-17 01:08PM  Yahoo Finance Video]
▶ US Market Indexes Gain on Monday   [08:25AM  GuruFocus.com]
▶ Travelers suspends buyback program   [07:40PM  CNBC Videos]
▶ See Markets React to Hurricane Irma in 8 Charts   [11:10AM  The Wall Street Journal]
▶ Insurers rebound even as Irma barrels toward Florida   [Sep-08-17 06:38PM  Investing.com]
▶ Wall Street Weak Ahead of Hurricane Irma   [03:27PM  GuruFocus.com]
▶ S&P 500 Holds Support; Cybersecurity Names Jump   [01:44PM  Investor's Business Daily]
▶ Stock Indexes Mixed; Two Battered Groups Rebound   [12:08PM  Investor's Business Daily]
▶ Travelers Shares Tips to Help Prepare for Hurricane Irma   [Sep-07-17 02:23PM  Business Wire]
▶ Markets Take a Battering   [10:43AM  Zacks]
▶ US Market Indexes Gain on Wednesday   [10:41AM  GuruFocus.com]
▶ After Harvey, insurance drones take to the Texas skies   [Sep-04-17 04:52PM  Associated Press]
▶ Weekly Wrap: All Eyes on Aftermath of Harvey   [Sep-02-17 06:00AM  Morningstar]
▶ What I learned after being robbed at gunpoint in Mexico   [Aug-31-17 09:28AM  MarketWatch]
▶ Nasdaq Leads As Stock Bounce Continues, But Dow Lags   [Aug-30-17 04:16PM  Investor's Business Daily]
▶ US Market Indexes Mostly Higher on Monday   [10:30AM  GuruFocus.com]
▶ Travelers Stock Rips Lower in a Flood of Selling   [Aug-28-17 12:23PM  TheStreet.com]
▶ Harvey Damages Oil Refineries   [10:02AM  Zacks]
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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