The Hartford Financial Services Group, Inc. HIG has been in investors’ good books owing to strategic initiatives and financial strength.
Its return-on-equity (ROE) reflects growth potential. The company’s trailing 12-month ROE of 12.6% compares favorably with the industry average of 7.5%, reflecting its efficiency in utilizing its shareholders’ funds.
Now let’s see what has been working in the stock’s favor.
The company has been taking up strategic initiatives over time to improve its risk profile. A series of well-executed strategic dispositions of its legacy run-off businesses also helped the company. Hartford Financial has been vending non-core businesses for a while now to concentrate on its U.S. operations and enhance its operating leverage. Apart from lowering expenses, boosting profitability and improving returns to its shareholders, these divestitures are increasing the company’s financial flexibility by freeing up more capital.
The company has been putting in efforts to solidify its portfolio through acquisitions.