The Progressive Corporation’s PGR compelling product portfolio, leadership position, strength in both Vehicle and Property businesses, healthy policies in force and retention continue to bode well for growth. These, along with favorable growth estimates, make it worth retaining in one’s portfolio.
PGR has a VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
Return on equity in the trailing 12 months was 12.8%, better than the industry average of 5.7%.
Zacks Rank & Price Performance
PGR currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 13.3% against the industry’s decrease of 6.6%.
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The Zacks Consensus Estimate for Progressive’s 2022 earnings is pegged at $4.54, indicating a 3% increase from the year-ago reported figure on 11.3% higher revenues of $51.4 billion. The consensus estimate for 2023 earnings is pegged at $6.35, indicating a 39.9% increase from the year-ago reported figure on 13.6% higher revenues of $58.4 billion.
The expected long-term earnings growth rate is pegged at 17.6%, better than the industry average of 11.6%. It has a Growth Score of A. This style score analyzes the growth prospects of a company.
The Zacks Consensus Estimate for 2023 has moved north by 0.2% in the past 30 days, reflecting analyst optimism.
Progressive’s net premium written grew 11% in the last 10 years, outperforming the industry average of 4%. Solid policies in force, competitive rates and its leadership position should help PGR retain the momentum.
Policy life expectancy (PLE), a measure for customer retention, has been exhibiting improvement over the last few years across all its business lines. Several strategic endeavors that are aimed at providing consumers with a distinctive new auto insurance option should help Progressive maintain solid PLE.
Progressive’s continued effort to cross-sell auto policies and Progressive Home Advantage bodes well. Growth momentum at Progressive’s Robinson (bundled home and auto) continued with policies-in-force growth of about 30%.
PGR’s combined ratio has averaged less than 93% over the past 10-year period. It compares favorably with the industry average combined ratio of more than 100%, reflecting superior underwriting discipline.
Effective Capital Deployment
Progressive has been paying dividends uninterruptedly since 1971, apart from buying back shares. Recently, the board of directors approved a 25 million share buyback program.
Stocks to Consider
Some better-ranked stocks in the property and casualty insurance industry are HCI Group, Inc. HCI, American Financial Group, Inc. AFG and United Fire Group, Inc. UFCS. While HCI Group and American Financial sport a Zacks Rank #1 (Strong Buy), United Fire Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 60 days. In the past year, HCI Group’s stock has lost 29.9%.
The Zacks Consensus Estimate for HCI’s 2022 and 2023 earnings per share indicates a year-over-year increase of 280.9% and 75%, respectively.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 41.72%. In the past year, American Financial has gained 12.7%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% north, respectively, in the past 60 days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 270.8%. In the past year, UFCS 's stock has increased 24.8%.
The Zacks Consensus Estimate for UFCS’s 2022 earnings has moved 23.5% north in the past 60 days.
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The Progressive Corporation (PGR) : Free Stock Analysis Report
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HCI Group, Inc. (HCI) : Free Stock Analysis Report
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