HIG

The Hartford is a high-quality property & casualty insurer being priced like a mediocre one. It earns a 20.2% return on equity, grew net income to $3.84B (+23.3% YoY) — the continuation of a clear post-2022 climb ($1.82B FY2022 → $2.50B FY2023 → $3.11B FY2024 → $3.84B FY2025) — and converted that into $13.32 of diluted EPS (+28.7%, amplified by a 3.3% reduction in share count). At $128.25 that is just 9.6x earnings, a discount to where a consistently 20%-ROE compounder typically trades. The filing corroborates the quality: in 2025 all three rating agencies upgraded the company — A.M. Best to 'a', S&P core subsidiaries to 'AA-' (issuer to 'A-' from 'BBB+'), and Moody's senior debt to 'A3' from 'Baa1' — each explicitly citing improved underwriting, strong stable profitability, and capital resiliency. That is an independent, hard-to-fake confirmation of earnings durability and lowers the cost of capital.

The balance sheet and capital return reinforce the buy. Operating cash flow of $5.92B exceeds reported net income, long-term debt is flat at $4.37B against $19.0B of equity (~0.23x), and the 3.53x liabilities/equity is overwhelmingly insurance reserves rather than financial leverage. Statutory capital for the insurance subsidiaries rose to $17.1B from $16.0B even after $2.3B of dividends up to the parent, and management returned ~$2.2B to shareholders in FY2025 ($1.61B buybacks + $592M dividends). Retained earnings climbed 14.9% to $24.7B. Internal controls were assessed effective with a clean Deloitte attestation.