Shares of Travelers Companies Inc (TRV) are moving on volatility today 1.02% or 1.23 from the open. The NYSE listed company saw a recent bid of 121.806 and 966394 shares have traded hands in the session.
Doing the proper research can go a long way when preparing to enter the stock market. Professional investors typically make sure that all the necessary research is completed when making crucial decisions. Of course, all the research in the world cannot guarantee success in the markets, but it can help to keep the investor one step ahead of the class. Understanding how the stock market functions can help the investor gain the confidence to start conquering the terrain. Building confidence in investing decisions can play a big part in the future success of the individual’s portfolio.
Turning to Return on Assets or ROA, Travelers Companies Inc (TRV) has a current ROA of 2.94. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets.
A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
Now let’s take a look at how the fundamentals are stacking up for Travelers Companies Inc (TRV). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued. Travelers Companies Inc currently has a yearly EPS of 10.04. This number is derived from the total net income divided by shares outstanding. In other words, EPS reveals how profitable a company is on a share owner basis.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Travelers Companies Inc (TRV) currently has Return on Equity of 12.78. ROE is a ratio that measures profits generated from the investments received from shareholders.
In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
Another ratio we can look at is the Return on Invested Capital or more commonly referred to as ROIC. Travelers Companies Inc (TRV) has a current ROIC of 10.22. ROIC is calculated by dividing Net Income – Dividends by Total Capital Invested. Similar to ROE, ROIC measures how effectively company management is using invested capital to generate company income. A high ROIC number typically reflects positively on company management while a low number typically reflects the opposite.