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Progressive Corp. (PGR) Up 31% YTD: Will the Rally Continue?
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The Progressive Corporation (PGR - Free Report) shares have gained 31.2% year to date against the industry's decrease of 3.9% and the Finance sector’s decline of 7.3%. The Zacks S&P 500 composite has risen 12.9% in the said time frame. With market capitalization of $55.6 billion, average volume of shares traded in the last three months was 2.2 million.
Improving premiums, solid policies in force, competitive rate and prudent underwriting continue to drive Progressive. The company delivered earnings surprise in two of the three reported quarters of 2020.
The company has been effectively improving its return on equity (ROE) over years. ROE of 28.9% in the trailing twelve months was better than the industry average of 5.6%, reflecting the company’s efficiency in utilizing shareholders’ fund.
Will the Bull Run Continue?
This Zacks Rank #3 (Hold) leading auto insurer has been witnessing improving premiums that increased at a five-year CAGR of 12.8%. We expect the momentum to continue given expansive multi-product lineup, solid policies in force, focus on becoming a one-stop insurance destination by bundling products, leadership in underwriting technology and application of quantitative analytics in pricing and risk selection.
Also, policy life expectancy (PLE), a measure for customer retention, has been exhibiting improvement over the last few years across all its business lines.
Being a property and casualty insurer, Progressive is exposed to catastrophes. Nonetheless, given prudent underwriting, combined ratio has averaged less than 93% over the past 10 years (2009-2019), comparing favorably with the industry average combined ratio of more than 100%.
Over the longer term, the company intends leveraging scale and capitalizing on technology to lower operating expenses. This in turn should aid margin expansion.
Progressive has been strengthening its balance sheet with improving cash balance and lowering leverage. It targets total debt to capital of less than 30% in 2020.
The company has a solid track of returning value to shareholders via share buybacks and dividends. Progressive shareholders’ returns were 25.1%, outperforming 11.7% for the S&P 500 during 2014-2019.
The Zacks Consensus Estimate for 2020 is pegged at $7.25, indicating year-over-year increase of 7.9% on 10.1% higher revenues of $41.8 billion. The expected long-term earnings growth rate is pegged at 6.4%.
The company currently has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors. The Zacks Consensus Estimate for 2020 has moved 1.8% north in the past 30 days.
Stocks to Consider
Some better-ranked companies from the same space are Alleghany , American Financial Group (AFG - Free Report) and Fidelity National Financial (FNF - Free Report) .
Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank.
American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2 (Buy).
Fidelity National delivered an earnings surprise of 18.40% in the last reported quarter. It currently carries a Zacks Rank #2.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year. Free: See Our Top Stock and 4 Runners Up >>
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Progressive Corp. (PGR) Up 31% YTD: Will the Rally Continue?
The Progressive Corporation (PGR - Free Report) shares have gained 31.2% year to date against the industry's decrease of 3.9% and the Finance sector’s decline of 7.3%. The Zacks S&P 500 composite has risen 12.9% in the said time frame. With market capitalization of $55.6 billion, average volume of shares traded in the last three months was 2.2 million.
Improving premiums, solid policies in force, competitive rate and prudent underwriting continue to drive Progressive. The company delivered earnings surprise in two of the three reported quarters of 2020.
The company has been effectively improving its return on equity (ROE) over years. ROE of 28.9% in the trailing twelve months was better than the industry average of 5.6%, reflecting the company’s efficiency in utilizing shareholders’ fund.
Will the Bull Run Continue?
This Zacks Rank #3 (Hold) leading auto insurer has been witnessing improving premiums that increased at a five-year CAGR of 12.8%. We expect the momentum to continue given expansive multi-product lineup, solid policies in force, focus on becoming a one-stop insurance destination by bundling products, leadership in underwriting technology and application of quantitative analytics in pricing and risk selection.
Also, policy life expectancy (PLE), a measure for customer retention, has been exhibiting improvement over the last few years across all its business lines.
Being a property and casualty insurer, Progressive is exposed to catastrophes. Nonetheless, given prudent underwriting, combined ratio has averaged less than 93% over the past 10 years (2009-2019), comparing favorably with the industry average combined ratio of more than 100%.
Over the longer term, the company intends leveraging scale and capitalizing on technology to lower operating expenses. This in turn should aid margin expansion.
Progressive has been strengthening its balance sheet with improving cash balance and lowering leverage. It targets total debt to capital of less than 30% in 2020.
The company has a solid track of returning value to shareholders via share buybacks and dividends. Progressive shareholders’ returns were 25.1%, outperforming 11.7% for the S&P 500 during 2014-2019.
The Zacks Consensus Estimate for 2020 is pegged at $7.25, indicating year-over-year increase of 7.9% on 10.1% higher revenues of $41.8 billion. The expected long-term earnings growth rate is pegged at 6.4%.
The company currently has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors. The Zacks Consensus Estimate for 2020 has moved 1.8% north in the past 30 days.
Stocks to Consider
Some better-ranked companies from the same space are Alleghany , American Financial Group (AFG - Free Report) and Fidelity National Financial (FNF - Free Report) .
Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank.
American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2 (Buy).
Fidelity National delivered an earnings surprise of 18.40% in the last reported quarter. It currently carries a Zacks Rank #2.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>