Executive Summary / Key Takeaways

• CNA Financial (CNA)'s Remarkable Turnaround: Under 25 years of Tisch leadership, CNA Financial has evolved from a "problem child" into a top-quartile commercial P&C underwriter, delivering a 92.8% combined ratio in Q3 2025 while generating $897 million in net income for Loews through nine months—yet the market continues to value this transformation at a conglomerate discount.

• Boardwalk Pipelines (BWP)'s Infrastructure Moat: Boardwalk Pipelines is capitalizing on America's energy transition with $3 billion in growth projects through 2029, driven by LNG export demand and data center power needs, having already increased EBITDA by $91 million year-over-year to $887 million—positioning it as a stable, fee-based counterweight to CNA Financial's cyclicality.

• Capital Allocation as Competitive Advantage: Loews has reduced its share count by almost two-thirds under James Tisch while maintaining a fortress balance sheet with $3.6 billion in parent company cash and investments, demonstrating the Tisch family's patient, opportunistic approach that contrasts sharply with public market short-termism.

• Universal Partnership Drives Hotel Growth: Loews Hotels' 50% interest in 11 Orlando properties with 11,000 rooms by end-2025, anchored by Universal's Epic Universe opening, transforms the segment from a collection of independent hotels into an integrated destination player—though near-term renovation headwinds mask this strategic value.

• The Conglomerate Discount Dilemma: Trading at 1.2x book value and 8.2% ROE, Loews trades at a significant discount to the sum of its parts, reflecting market skepticism about conglomerate structures—yet this same structure provides unique resilience and optionality that pure-play competitors cannot replicate.

Setting the Scene: The Conglomerate That Works

Loews Corporation, incorporated in 1969 but tracing its roots to Larry and Bob Tisch's 1960 Summit Hotel construction, operates as a diversified holding company with a distinctive Tisch family imprint. Unlike modern conglomerates assembled through financial engineering, Loews built its portfolio through opportunistic, often contrarian, investments in insurance, energy infrastructure, and hospitality. The company makes money by allocating capital across these segments, generating value through operational improvements, strategic timing, and patient ownership.

This model stands apart in an era of specialization. While competitors like Chubb and Travelers focus exclusively on insurance, and Kinder Morgan dominates pipelines, Loews operates across three distinct sectors. This diversification creates a unique risk profile: CNA Financial's property and casualty operations face catastrophe risks, Boardwalk Pipelines's pipelines benefit from secular energy trends, and Loews Hotels rides consumer discretionary cycles. The Corporate segment, including Altium Packaging, adds further diversification.

The Tisch family's control—James Tisch served as CEO for 25 years before becoming Chairman in 2025, with Ben Tisch now CEO—enables a long-term orientation that public markets typically penalize. This governance structure explains Loews' consistent share repurchase program and its willingness to make contrarian bets, such as acquiring CNA Financial in 1974 for the equivalent of $1.67 per share or buying supertankers at scrap value in the early 1980s. These historical moves aren't mere anecdotes; they demonstrate a pattern of buying quality assets during periods of distress and nurturing them over decades.

Technology, Products, and Strategic Differentiation

CNA Financial represents Loews' most significant transformation. The company shifted from a multi-line insurer to a focused commercial P&C specialist, divesting life insurance, consumer finance, and personal auto through the 2000s. This focus, combined with disciplined underwriting, produced a 91.3% underlying combined ratio in Q3 2025—meaning CNA Financial generates nearly nine cents of profit per premium dollar before investment income. The Specialty and Commercial lines drive this performance, with net written premiums growing 8% in Q3 2025 through 15% new business growth and 85% retention.

Boardwalk Pipelines operates a 13,615-mile natural gas pipeline network with 213 Bcf of storage capacity, generating 95% of revenue from fee-based contracts that insulate it from commodity price volatility. The company's strategic differentiation lies in its salt dome storage facilities and Gulf Coast proximity to LNG export terminals. Growth projects totaling 4.2 Bcfd capacity through 2029—including the 1.5 Bcfd Texas Gateway Project announced in October 2025—position Boardwalk Pipelines to capture rising natural gas demand from domestic manufacturing, electric vehicle adoption, and data center construction. This infrastructure moat is difficult to replicate, requiring billions in capital and years of regulatory approvals.

Loews Hotels has evolved from 14 properties in 1999 to 28 properties by 2024, with a strategic pivot toward immersive destinations. The Universal Orlando partnership exemplifies this shift: by end-2025, Loews will have 50% ownership in 11 hotels with 11,000 rooms connected to Universal's Epic Universe theme park. This transforms the business from individual properties competing on location to an integrated ecosystem benefiting from Universal's marketing and guest capture. The 888-room Arlington Hotel, opened in February 2024 near sports stadiums, demonstrates the same strategy applied to group business.

Financial Performance & Segment Dynamics

Loews' consolidated results for Q3 2025 show net income of $504 million, up 26% year-over-year, driven by CNA Financial's $371 million contribution and Boardwalk Pipelines's $94 million. However, the segment dynamics reveal a more nuanced story. CNA Financial's performance improved despite $41 million in catastrophe losses, down from $143 million in Q3 2024, demonstrating the value of geographic and line-of-business diversification. Net investment income rose, benefiting from higher interest rates on CNA Financial's $47 billion portfolio—an advantage that pure-play insurers cannot offset with non-insurance earnings.

Boardwalk Pipelines's EBITDA increased 7% to $267 million in Q3 2025, with year-to-date EBITDA up 11% to $887 million. This growth stems from re-contracting at higher rates, completed growth projects, and increased storage revenues. The segment generated $334 million in net income for Loews through nine months, providing stable cash flow that funded $1.1 billion in parent company dividends. This counter-cyclical stability is precisely why Loews maintains a pipeline business: when insurance cats are high, Boardwalk Pipelines's fee-based earnings provide ballast.

Loews Hotels showed mixed results, with Q3 2025 net income of $3 million versus $8 million in Q3 2024, primarily due to Miami Beach renovations. However, the nine-month revenue increased 2.5% to $710 million, and equity income from Universal joint ventures rose $25 million as three new hotels opened in 2025. The renovation headwinds mask strategic progress: the segment's Adjusted EBITDA margin remains healthy, and the Universal partnership positions it for accelerated growth once all properties are fully operational.

The Corporate segment's net income declined to $42 million in Q3 2025 from $73 million in Q3 2024, reflecting lower investment income from the parent company's trading portfolio. This volatility is inherent to Loews' structure, where the parent holds significant cash and investments for opportunistic deployment. The $3.6 billion in parent cash and investments at September 30, 2025, up from $3.3 billion at year-end 2024, provides dry powder for acquisitions, share repurchases, or subsidiary investments.

Outlook, Management Guidance, and Execution Risk

Management's guidance reflects confidence in sustained growth across segments. CNA Financial expects continued premium growth, with Q3 2025 new business up 15% and renewal rates stable at 5% (three points rate, two points exposure). The company is proactively managing its run-off long-term care business, buying out 2,100 policies for $67 million in the first nine months of 2024, following 6,600 policies for $193 million in 2023. This derisking, while costly, improves CNA Financial's risk profile and frees capital for higher-return P&C business.

Boardwalk Pipelines's $3 billion growth project pipeline through 2029 represents the largest capital deployment in the segment's history. Projects like the Kosciusko Junction (1.2 Bcfd, H1 2029) and Texas Gateway (1.5 Bcfd, H2 2029) target LNG export and power generation demand. Management expects to finance these through operating cash flows and long-term debt, maintaining current distribution levels to Loews. The key execution risk is timing: regulatory approvals, land acquisition, and construction delays could push in-service dates, and failure to meet milestones could allow counterparties to terminate contracts.

Loews Hotels anticipates the three new Universal properties—Stella Nova (750 rooms, opened January 2025), Terra Luna (750 rooms, February 2025), and Grand Helios (500 rooms, late 2025)—will drive significant earnings growth once operational. The Epic Universe theme park's May 22, 2025 opening should boost occupancy and rates across all 11 Orlando properties. However, integration costs and pre-opening expenses will pressure near-term margins before benefits materialize.

Risks and Asymmetries

Catastrophe risk remains the primary threat to CNA Financial's profitability. While Q3 2025 cat losses were only $41 million versus $143 million in Q3 2024, severe weather events can generate hundreds of millions in losses. The $200 million in nine-month cat losses, though down from $313 million in 2024, demonstrates the volatility inherent in commercial property insurance. CNA Financial's geographic diversification helps, but climate change is increasing both frequency and severity of events, potentially compressing margins despite rate increases.

Boardwalk Pipelines's growth projects face execution risks that could materially impact returns. The company acknowledges that actual costs and in-service dates "may differ, perhaps materially, from its estimates." Regulatory delays, material cost inflation, or labor shortages could increase the $3 billion budget, while failure to secure long-term contracts at expected rates would reduce returns. The October 2025 Texas Gateway precedent agreement mitigates some revenue risk, but the scale of these projects concentrates execution risk.

The conglomerate structure itself presents a valuation risk. The market persistently applies a discount to sum-of-parts valuations, as seen in Loews' 1.2x price-to-book ratio versus pure-play peers trading at 1.6x-2.0x. While this creates opportunity for share repurchases, it also limits the stock's upside unless the discount narrows. The Tisch family's control, while beneficial for long-term strategy, reduces activist pressure to unlock value through breakups or spinoffs.

Competitive Context and Positioning

Loews competes against focused specialists in each segment, creating both advantages and disadvantages. In insurance, CNA Financial's 92.8% combined ratio compares favorably to Travelers (TRV)'s 90% and Chubb (CB)'s 81.8%, but CNA Financial's scale is smaller and its product mix more concentrated in specialty lines. Chubb's global network and Travelers's direct distribution create cost advantages that CNA Financial's broker-based model cannot match. However, CNA Financial's relationship-driven approach and surety expertise provide defensible niches where pricing discipline holds.

Boardwalk Pipelines's 13,615-mile network is dwarfed by Kinder Morgan (KMI)'s 70,000 miles, limiting its bargaining power with producers and LNG exporters. However, Boardwalk Pipelines's Gulf Coast focus and salt dome storage create regional moats that KMI's broad footprint cannot replicate. The 4.2 Bcfd growth pipeline is modest compared to KMI's project backlog, but Boardwalk Pipelines's smaller scale allows more selective, higher-return investments.

Loews Hotels' 28 properties pale beside Hilton (HLT)'s or Marriott (MAR)'s global footprints, but its Universal partnership creates a unique destination ecosystem that independent hotels cannot match. The 50% ownership structure aligns incentives while limiting capital requirements. This contrasts with pure-play hotel REITs that must own 100% of assets, exposing them to greater leverage and cyclicality.

The conglomerate structure itself is Loews' most distinctive competitive feature. While Berkshire Hathaway (BRK-B)'s scale provides unmatched investment float and acquisition capacity, Loews' smaller size enables nimbler decisions and sector-specific expertise. Berkshire Hathaway's 0.21 debt-to-equity ratio and $176.80 cash per share reflect its insurance-driven model, while Loews' 0.49 debt-to-equity and $3.6 billion parent cash reflect a more balanced capital structure. This diversification reduces volatility but also caps growth rates—Loews' 4.6% Q3 revenue growth trails Chubb's 7.5% and Travelers's 53% core income growth.

Valuation Context

At $106.31 per share, Loews trades at 1.2x book value of $88.39 and 15.4x trailing earnings. The price-to-free-cash-flow ratio of 7.3x and price-to-operating-cash-flow of 6.1x suggest the market values the cash-generative capacity more than reported earnings. Enterprise value of $25.1 billion represents 1.4x revenue and 8.6x EBITDA—multiples that reflect the conglomerate discount.

Comparing these metrics to pure-play peers reveals the valuation gap. Chubb trades at 1.6x book and 12.3x earnings with a 13.6% ROE; Travelers at 2.0x book and 11.4x earnings with 19.8% ROE. Kinder Morgan trades at 1.9x book but 22.0x earnings, reflecting its asset-intensive model. Loews' 8.2% ROE lags these peers, but its diversified risk profile justifies lower returns. The 0.23% dividend yield, while modest, reflects a capital allocation strategy prioritizing share repurchases over payouts—Loews repurchased $706 million in shares during the first nine months of 2025.

The key valuation question is whether the conglomerate discount will persist or narrow. James Tisch has long argued Loews trades at a "meaningful discount to intrinsic value," making share repurchases "highly accretive." With shares outstanding reduced by almost two-thirds during his tenure, this strategy has created substantial value for remaining shareholders. However, the discount persists, suggesting the market either doubts management's ability to allocate capital or prefers pure-play exposure.

Conclusion: The Patient Capital Premium

Loews Corporation represents a rare example of a conglomerate that creates value through patient, opportunistic capital allocation rather than financial engineering. The transformation of CNA Financial from problem child to top-quartile underwriter, Boardwalk Pipelines's strategic positioning for America's energy transition, and the Universal partnership's destination ecosystem demonstrate the Tisch family's ability to nurture assets over decades.

The critical variables for the investment thesis are execution of Boardwalk Pipelines's $3 billion growth pipeline and CNA Financial's ability to maintain underwriting discipline amid rising cat risks. If Boardwalk Pipelines's projects come online on time and budget, the segment could generate an additional $200-300 million in annual EBITDA by 2030. If CNA Financial's combined ratio stays below 95% while growing premiums 5-8% annually, it will continue delivering $1.2-1.5 billion in annual net income to Loews.

The conglomerate structure provides resilience that pure-play competitors lack, but also caps growth and perpetuates a valuation discount. For investors willing to accept lower growth in exchange for lower volatility and patient capital allocation, Loews offers a unique proposition. The stock's performance will likely depend on whether management can demonstrate that the sum-of-parts discount is unwarranted, either through continued operational improvements or more aggressive capital return. With $3.6 billion in parent cash and a consistent repurchase program, Loews has the tools to close this gap—if the market is willing to recognize it.