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Should You Retain Progressive (PGR) Stock in Your Portfolio?
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Progressive Corporation (PGR - Free Report) has been gaining momentum over the past many quarters on the back of growth in special lines business, higher average assets and underwriting profitability.
Growth Projections
The Zacks Consensus Estimate for Progressive’s 2022 earnings is pegged at $4.87, indicating a 10.4% increase from the year-ago reported figure on 12.1% higher revenues of $51.8 billion. The consensus estimate for 2023 earnings stands at $6.32, indicating a 29.8% increase from the year-ago reported figure on 12.1% higher revenues of $58.1 billion.
The expected long-term earnings growth rate is pegged at 18%, higher than the industry average of 12.2%.
Northbound Estimate Revision
The Zacks Consensus Estimate for PGR’s 2022 and 2023 earnings has moved 0.4% and 1.1% north in the past seven days. This should instill investors' confidence in the stock.
Earnings Surprise History
Progressive has a solid track record of beating earnings estimates in four of the last six quarters.
Zacks Rank & Price Performance
Progressive currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 20.7% compared with the industry’s increase of 18.2%.
Image Source: Zacks Investment Research
Style Score
Progressive is well poised for progress, as is evident from its favorable 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.
Return on Equity
Progressive’s return on equity for the trailing 12 months is 14.7%, better than the industry average of 5.9%. This reflects efficiency in utilizing shareholders’ funds.
Business Tailwinds
Progressive continues to witness solid premium and policy in-force growth across its Personal Lines, Commercial Lines and Property operating segments.
Riding on higher net premiums earned, improved investment income, increased fees and other revenues and service revenues, its revenues increased 12.2% in the last five years (2017-2021). Its strong performance across Personal Lines, Commercial Lines and Property is likely to drive revenues going forward.
The Personal Lines segment is likely to improve, riding on solid growth in special lines business and renewal activity in the personal auto business. Increasing average written premium per policy should benefit the Commercial Lines business.
By virtue of high new business volume levels, and higher premiums in the Transportation Network Company (TNC) business, premiums will likely grow.
The combination of an increase in average assets and an increase in portfolio yields is likely to drive net investment income, an important driver of the top line.
Riding on the underwriting profitability in the Personal and Commercial Lines of business, the insurer should continue to witness a healthy combined ratio.
Progressive has a reinsurance program in the Property business, which is intended to reduce overall risk, protect capital from the costs associated with catastrophic events, and manage exposure in commercial auto, TNC, BOP, and workers’ compensation products.
Progressive boasts an impressive solvency level as well. Its insurance operations create liquidity by collecting and investing premiums from new and renewal businesses in advance of paying claims. PGR exited 2021 with cash and cash equivalents, which increased more than two-fold year over year.
The bottom line of Fidelity National surpassed earnings estimates in each of the last four quarters, the average being 31.73%. Year to date, the insurer has declined 16.6%.
The Zacks Consensus Estimate for Fidelity National’s 2022 earnings has moved 3.3% north in the past 30 days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. Year to date, UFCS stock has rallied 28.4%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. Year to date, Kinsale Capital has declined 3.6%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 5.9% and 8.2% north, respectively, in the past 60 days.
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Should You Retain Progressive (PGR) Stock in Your Portfolio?
Progressive Corporation (PGR - Free Report) has been gaining momentum over the past many quarters on the back of growth in special lines business, higher average assets and underwriting profitability.
Growth Projections
The Zacks Consensus Estimate for Progressive’s 2022 earnings is pegged at $4.87, indicating a 10.4% increase from the year-ago reported figure on 12.1% higher revenues of $51.8 billion. The consensus estimate for 2023 earnings stands at $6.32, indicating a 29.8% increase from the year-ago reported figure on 12.1% higher revenues of $58.1 billion.
The expected long-term earnings growth rate is pegged at 18%, higher than the industry average of 12.2%.
Northbound Estimate Revision
The Zacks Consensus Estimate for PGR’s 2022 and 2023 earnings has moved 0.4% and 1.1% north in the past seven days. This should instill investors' confidence in the stock.
Earnings Surprise History
Progressive has a solid track record of beating earnings estimates in four of the last six quarters.
Zacks Rank & Price Performance
Progressive currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 20.7% compared with the industry’s increase of 18.2%.
Image Source: Zacks Investment Research
Style Score
Progressive is well poised for progress, as is evident from its favorable 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.
Return on Equity
Progressive’s return on equity for the trailing 12 months is 14.7%, better than the industry average of 5.9%. This reflects efficiency in utilizing shareholders’ funds.
Business Tailwinds
Progressive continues to witness solid premium and policy in-force growth across its Personal Lines, Commercial Lines and Property operating segments.
Riding on higher net premiums earned, improved investment income, increased fees and other revenues and service revenues, its revenues increased 12.2% in the last five years (2017-2021). Its strong performance across Personal Lines, Commercial Lines and Property is likely to drive revenues going forward.
The Personal Lines segment is likely to improve, riding on solid growth in special lines business and renewal activity in the personal auto business. Increasing average written premium per policy should benefit the Commercial Lines business.
By virtue of high new business volume levels, and higher premiums in the Transportation Network Company (TNC) business, premiums will likely grow.
The combination of an increase in average assets and an increase in portfolio yields is likely to drive net investment income, an important driver of the top line.
Riding on the underwriting profitability in the Personal and Commercial Lines of business, the insurer should continue to witness a healthy combined ratio.
Progressive has a reinsurance program in the Property business, which is intended to reduce overall risk, protect capital from the costs associated with catastrophic events, and manage exposure in commercial auto, TNC, BOP, and workers’ compensation products.
Progressive boasts an impressive solvency level as well. Its insurance operations create liquidity by collecting and investing premiums from new and renewal businesses in advance of paying claims. PGR exited 2021 with cash and cash equivalents, which increased more than two-fold year over year.
Stocks to Consider
Some better-ranked stocks from the insurance sector are Fidelity National Financial, Inc. (FNF - Free Report) , United Fire Group, Inc. (UFCS - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Fidelity National surpassed earnings estimates in each of the last four quarters, the average being 31.73%. Year to date, the insurer has declined 16.6%.
The Zacks Consensus Estimate for Fidelity National’s 2022 earnings has moved 3.3% north in the past 30 days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. Year to date, UFCS stock has rallied 28.4%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. Year to date, Kinsale Capital has declined 3.6%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 5.9% and 8.2% north, respectively, in the past 60 days.