Discounted Cash Flow

Hanover Insurance Group, Inc.

THG · Based on 10 years of SEC filings

Average annual growth rates

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Average annual growth is the mean year-over-year change across each period.

Endpoint CAGR (better for long term trend)

Metric 10-Year 5-Year 3-Year
Sales
Free Cash Flow
Average (FCF & NI)
Net Income

Endpoint CAGR is the compound annual rate from the first to last year in each period.

Projections use average year-over-year growth. Change this in Settings.

Projected growth rate

Free cash flow growth
10-year: — 5-year: — 3-year: —
Averaged growth (FCF & NI)
10-year: — 5-year: — 3-year: —
Net income growth
10-year: — 5-year: — 3-year: —
Sales growth (not added to calculations)
10-year: — 5-year: — 3-year: —

Click a greyed-out slider to switch metrics. Slide between the 10-year, 5-year, and 3-year historic growth rates for FCF, net income, or their average.

%
%

Historical inputs (10 fiscal years)

YEAR Sales Net Income Free Cash Flow Net Margin EPS (diluted)
2016 $4.9b $155.1m $721.9m 3.1% $3.63
2017 $5.2b (4.8%) $186.2m (20.1%) $686.0m (-5.0%) 3.6% (14.5%) $4.38 (20.7%)
2018 $4.5b (-13.3%) $391.0m (110.0%) $538.2m (-21.5%) 8.7% (142.2%) $9.21 (110.3%)
2019 $4.9b (8.8%) $425.1m (8.7%) $589.6m (9.6%) 8.7% (-0.1%) $10.62 (15.3%)
2020 $4.8b (-1.3%) $358.7m (-15.6%) $692.7m (17.5%) 7.4% (-14.5%) $9.52 (-10.4%)
2021 $5.2b (8.3%) $418.7m (16.7%) $815.7m (17.8%) 8.0% (7.8%) $11.67 (22.6%)
2022 $5.5b (4.6%) $116.0m (-72.3%) $704.5m (-13.6%) 2.1% (-73.5%) $3.26 (-72.1%)
2023 $6.0b (9.6%) $35.3m (-69.6%) $349.8m (-50.3%) 0.6% (-72.2%) $0.99 (-69.6%)
2024 $6.2b (4.1%) $426.0m (1106.8%) $796.2m (127.6%) 6.8% (1059.6%) $11.85 (1097.0%)
2025 $6.6b (5.7%) $662.5m (55.5%) $1.2b (47.0%) 10.0% (47.1%) $18.50 (56.1%)

Base FCF: (latest fiscal year)

Discount rate: %

Terminal growth:

Projection period: years

Alt A decline yrs:

Alt B total yrs:

Values abbreviated: b = billions, m = millions, k = thousands.

Projected cash flows

Year Projected cash flow Discount Factor Present Value

PV of projected FCF:

Terminal FCF:

Terminal value:

PV of terminal value:

Enterprise value (DCF):

DCF price per share:

Current price:

Alternative DCF Models

Model Fair Value Upside PV(FCFs) PV(Terminal) Total Years
Standard (10yr→TV) 10 + TV
Alt A (Gradual Decline)
Alt B (30yr Hard Stop) N/A

This is a simplified DCF model for illustration. It uses reported free cash flow, a single growth assumption, fixed WACC, and a Gordon Growth terminal value. It is not investment advice.

+ 10YR Financials Balance Sheet (10YR) Cash Flow (10YR) DCF Model