ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The Hanover Insurance Group's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 5.08%.
As of today (2026-06-30), The Hanover Insurance Group's WACC % is 6.02%. The Hanover Insurance Group's ROIC % is 5.00% (calculated using TTM income statement data).
The Hanover Insurance Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The Hanover Insurance Group (NYSE:THG) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, The Hanover Insurance Group's WACC % is 6.02%. The Hanover Insurance Group's ROIC % is 5.00% (calculated using TTM income statement data).
The Hanover Insurance Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
The Hanover Insurance Group ROIC % Related Terms
The Hanover Insurance Group ROIC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Insurance - Property & Casualty subindustry, The Hanover Insurance Group's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Hanover Insurance Group ROIC % vs Insurance Industry
For the Insurance industry and Financial Services sector, The Hanover Insurance Group's ROIC % distribution charts can be found below:
* The bar in red indicates where The Hanover Insurance Group's ROIC % falls into.
Note:
The EBIT data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The Hanover Insurance Group (THG) has a ROIC % of 5.08% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on The Hanover Insurance Group and its competitors.
Is The Hanover Insurance Group's ROIC % too high?
The Hanover Insurance Group's current ROIC % is 5.08%. The Insurance industry median ROIC % is 3.36. The Hanover Insurance Group's value of 5.08% is 51.2% above this industry median. Overall, The Hanover Insurance Group has a GF Score™ of 81/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does The Hanover Insurance Group's ROIC % compare to KNSL and MCY?
The Hanover Insurance Group's ROIC % of 5.08% can be compared against companies in the Insurance industry. The industry median ROIC % is 3.36. The Hanover Insurance Group's value of 5.08% is 51.2% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for an Insurance company?
The median ROIC % among Insurance companies is 3.36, based on 372 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The Hanover Insurance Group's current ROIC % of 5.08% is 51.2% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on The Hanover Insurance Group and its competitors. For the Insurance industry, the median ROIC % is 3.36 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Hanover Insurance Group's current ROIC % is 5.08%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Hanover Insurance Group stock overvalued right now?
Based on GuruFocus' analysis, The Hanover Insurance Group (THG) is currently considered Fairly Valued. The stock's GF Value™ is $201.18, compared to a current price of $214.12 — trading 6.4% above its estimated fair value. The current ROIC % is 5.08% and 51.2% above the Insurance industry median of 3.36. The Hanover Insurance Group's overall GF Score™ is 81/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For The Hanover Insurance Group (THG), the current ROIC % is 5.08% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The Hanover Insurance Group (THG) Overvalued in 2026?
Based on GuruFocus' analysis, The Hanover Insurance Group stock appears to be overvalued.
The current stock price of $214.12 is trading 6.4% above its estimated GF Value™ of $201.18.
GuruFocus considers The Hanover Insurance Group to be Fairly Valued.
Key valuation signals for THG:
ROIC %: 5.08%
GF Value™: $201.18 vs. price of $214.12 (6.4% above fair value)
Industry Position: 51.2% above the Insurance median
No single metric tells the full story. See the THG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The Hanover Insurance Group Inc is a holding company whose primary business is offering property and casualty insurance products and services. The company markets itself through independent agents and brokers in the United States while conducting business through Hanover Insurance, Citizens and other THG subsidiaries. The company conducts business operations through four operating segments: Core Commercial, Specialty, Personal Lines, and Other. The company operates an investment portfolio that is exposed to fixed-income securities.
81GF Score
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