MeritValue

HANOVER INSURANCE GROUP, INC.

THGdata completeness 100%18 fiscal years on file
The thesis, from the filings

HANOVER INSURANCE GROUP, INC. earns about 12% on invested capital, comfortably above its ~9% cost of capital, with a roughly flat share count — a real edge showing up in the numbers. The estimate methods put fair value between $120.04 and $391.54 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$5.23B1$5.47B2$5.99B3$6.24B3$6.59B3
Net income$422.8M4$116M5$35.3M6$426M6$662.5M6
Operating cash flow$823.7M7$722.3M8$361.7M9$806.4M9$1.18B9
Capital expenditure$8M10$17.8M11$11.9M12$10.2M12$7.7M12
Free cash flow (derived)$815.7M7$704.5M8$349.8M9$796.2M9$1.17B9
Total debt——$783.2M13$784.1M14$1.22B14
Cash & equivalents$230.9M15$305M16$316.1M17$435.5M18$1.12B18
Diluted shares36.4M36.1M36.1M36.4M36.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$978.49
your share of equity
Profit it earned you last year
$181.51
Free cash flow it threw off
$320.66
Debt you’d be carrying
$333.78

10 shares is a claim on $978.49 of net worth that earned you $181.51 and generated $320.66 of cash last year, against $333.78 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
12% avg · 5y
FY21 15%FY22 7%FY23 2%FY24 14%FY25 19%

It earned about 12% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
+0% shares · 5y

Share count is roughly flat over 5 years — little dilution, little buyback. Total debt has risen 56% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $120.04 and $391.54 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$391.54
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth4.2%
  • fcfBase$796.2M
DCF · Growth Exit 5Y
$370.88
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth4.2%
  • fcfBase$796.2M
Earnings Power Value
$120.04
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$422.8M
  • growthAssumed0.0%
Graham Number
$199.95
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years4.2%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $370.88
The three cases
Bear0.0%$309.05
Base4.2%$370.88
Bull9.2%$458.52

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 4.2%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000950170-24-018917 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-025093 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-060983 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000950170-24-018917 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-025093 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-060983 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000950170-24-018917 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-025093 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-060983 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000950170-24-018917 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-025093 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-060983 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2023-12-31 · accession 0000950170-25-025093 (LongTermDebt)
  14. 10-K · period ending 2024-12-31 · accession 0001193125-26-060983 (LongTermDebt)
  15. 10-K · period ending 2021-12-31 · accession 0000950170-23-004178 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2022-12-31 · accession 0000950170-24-018917 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2023-12-31 · accession 0000950170-25-025093 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2024-12-31 · accession 0001193125-26-060983 (CashAndCashEquivalentsAtCarryingValue)