Schutz's portfolio these days is eclectic, ranging from well-known names, like insurance giant Travelers (TRV) and investment bank-turned-"regular"-bank Morgan Stanley (MS), to lesser-knowns, like Invesco Mortgage Capital (IVR) and Chimera Investment (CIM). The last two are specialty finance companies established to invest in distressed real-estate assets, mortgage loans and mortgage-backed securities. "These kinds of new entities will benefit as book values grow; meanwhile, they will be paying out significant yields," Schutz says.

Increased dividend to $0.33 from $0.30 for shareholders of record on 12/10.

The monster insurer and fellow Dow stock Travelers (TRV) is boosting the dividend and showing you how a responsible financial can behave.

Not surprisingly in the current environment, only two financial companies made it to our final screen. They are property-casualty company Traveler s (TRV), with an earnings yield of 15% and mean long-term earnings-per-share growth estimated at 8.5%, and Warren Buffett's financial conglomerate Berkshire Hathaway (BRKA), with interests in insurance as well as manufacturing, media, consumer-discretionary and retail sectors and an earnings yield of 7.5%. Travelers' conservative management of its investment portfolio, stable personal-lines business, manageable debt load, and strong balance sheet has helped it weather the current downturn well, and should give it an edge in a recovery.

The largest U.S. insurer was among the most active names on the NYSE Tuesday.

Property-and-casualty insurance stocks got a lift recently amid expectations of an end to the slide in commercial premiums. Yet, Allstate (ALL) and The Travelers Companies (TRV) still trade at or under book value, while two of the strongest insurers, Ace (ACE) and Chubb (CB), trade at modest premiums to book and at less than 10 times projected 2009 profits. Depressed asset managers like Franklin Resources (BEN) and AllianceBernstein (AB) trade for 10 to 15 times projected 2009 profits.

PE of 6, a PEG of 0.73, and it pays a yield of 2.8%.

Cramer wasn’t recommending any particular stock, but he did say names like Allstate [ALL], MetLife [MET], Prudential [PRU] Chubb [CB] and The Travelers [TRV], which dealt mainly in the safer property, casualty and life insurances, stand to gain the most by any AIG fallout.

9/8/2008

Buy - Price 44.66 on July 23
by Sandler O'Neill

Travelers is a holding company principally engaged in providing, through subsidiaries, commercial and personal property and casualty insurance. TRV reported 2Q08 operating earnings of $1.50 a share, versus our $1.17 estimate and consensus $1.45. The quarter benefited from...56 cents a share (after tax) of favorable reserve development. ...TRV maintained '08 earnings guidance in a range of $5.55 to $5.85 a share, [which] doesn't assume any additional prior-year reserve development. We expect '08 operating EPS of $5.77; consensus is $5.97. Target: 59. Market cap: $26.5 billion.