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Progressive's (PGR) October Earnings, Revenues Rise Y/Y

·3-min read

The Progressive Corporation PGR reported earnings per share of 63 cents for October 2021, up 58% year over year. The improvement was driven by an increase in revenues that offset the rise in expenses.

Progressive’s shares have lost 8.2% year to date against the industry’s growth of 17.9%.

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October Numbers in Detail

Progressive recorded net premiums written of $4.3 billion, up 15% from $3.8 billion in the year-ago month. Net premiums earned were $4.4 billion, up 14% from about $3.9 billion reported in the year-ago month.

Net realized gain on securities of $302.1 million versus 40.3 million loss incurred in the year-ago month.

Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 460 basis points (bps) year over year to 97.2.

Progressive’s operating revenues were $4.6 billion, improving 12.4% year over year, owing to a 12.9% increase in premiums and a 29.8% jump in service revenues. However, 9.7% lower investment income and 2.2% lower fees were partial drags.

Total expenses rose 18.1% to $4.4 billion, primarily on account of 23.2% higher losses and loss adjustment expenses and a 10.3% rise in policy acquisition costs.

In October, policies in force were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment improved 7% year over year to 17.8 million. Special Lines increased 8% from the year-earlier month to 5.3 million policies.

In Progressive’s Personal Auto segment, Agency Auto expanded 5% to 8 million while Direct Auto increased 9% to 9.6 million.

Progressive’s Commercial Auto segment rose 18% year over year to about 1 million. The Property business had 2.8 million policies in force in the reported month, up 13% year over year.

The company’s book value per share was $31.13 as of Oct 30, 2021, up 3.1% from $30.20 on Oct 30, 2020.

Return on equity in the trailing 12 months was 19.9%, down 1460 bps from 34.5% in October 2020. The debt-to-total-capital ratio improved 210 bps year over year to 20.8 as of Oct 30, 2021.

Progressive currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Some better-ranked stocks from the same space include First American Financial FAF, Kinsale Capital Group KNSL and Cincinnati Financial CINF.

First American sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for 2021 and 2022 earnings has moved up 5.5% and 6.3%, respectively, in the past 30 days. First American delivered a four-quarter average earnings surprise of 29.19%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for 2021 and 2022 earnings of Kinsale Capital, sporting a Zacks Rank #1, has moved up 15.2% and 11.7% in the past 30 days. Kinsale Capital delivered a four-quarter average earnings surprise of 37.63%.

Cincinnati Financial carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2021 and 2022 has moved up 0.9% and 5% in the past 30 days. Cincinnati Financial delivered a four-quarter average earnings surprise of 40.05%.

Shares of First American Financial, Kinsale Capital and Cincinnati Financial have gained 47.5%, 3.5% and 35.9%, respectively year to date.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

The Progressive Corporation (PGR) : Free Stock Analysis Report

First American Financial Corporation (FAF) : Free Stock Analysis Report

Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report

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