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Here's Why You Should Stay Invested in Progressive (PGR) Stock

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The Progressive Corporation’s (PGR - Free Report) compelling portfolio, leadership position, strength in the Vehicle and Property businesses, healthy policies in force, retention and solid capital position and favorable growth estimates make it worth retaining in one’s portfolio.

Zacks Rank & Price Performance

Progressive currently carries a Zacks Rank #3 (Hold). In a year, the stock has rallied 21.7%, outperforming the industry’s increase of 1.8%.

Zacks Investment Research
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Northbound Estimate Revision

The Zacks Consensus Estimate for 2023 earnings has moved 0.8% north in the past 30 days, reflecting analysts’ optimism.

Optimistic Growth Projections

The Zacks Consensus Estimate for Progressive’s 2023 earnings is pegged at $6.70, indicating a 64.6% increase from the year-ago estimated figure on 12.1% higher revenues of $57.1 billion. The long-term earnings growth rate is currently pegged at 18.9%, better than the industry average of 9.7%.

PGR has a Growth Score of A. This style score identifies the growth prospects of a company.

Growth Drivers

Net premiums written by Progressive increased 11% over a decade and beat the industry average of 4%. Progressive is the largest seller of motorcycle policies, a market leader in commercial auto insurance and one of the top 15 homeowner carriers based on premiums written. A compelling product portfolio, leadership position, healthy policies in force, better pricing and a solid retention ratio should help PGR improve its premium.

Policy life expectancy (PLE), a measure of customer retention, has improved in the last few years across all business lines. Strategic initiatives like the distinctive new auto insurance option and cross-selling homes with auto insurance should continue to drive higher PLE.

Prudent underwriting has helped Progressive deliver a combined ratio of less than 93%, on average, in a decade. This compared favorably with the industry’s average combined ratio of more than 100%.

PGR’s operational excellence supports a solid capital position, which enhances shareholders’ value. Progressive has been paying out dividends uninterruptedly since 1971 and also engages in share buybacks. The company has a VGM Score of A.

Stocks to Consider

Some better-ranked stocks from the property and casualty insurance industry are Berkshire Hathaway Inc. (BRK.B - Free Report) , Root, Inc. (ROOT - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) . While Berkshire and Root each sport a Zacks Rank #1 (Strong Buy), Kinsale Capital carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Berkshire Hathaway’s earnings surpassed estimates in all the last four quarters, the average beat being 28.18%. In the past year, BRK.B has dropped 0.7%.

The Zacks Consensus Estimate for Berkshire’s 2023 earnings indicates a year-over-year increase of 11.9%. The same has moved 12.3% north in the last 60 days.

Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has declined 88.9%.

The Zacks Consensus Estimate for Root’s 2023 earnings indicates a year-over-year increase of 24%. The same has moved 2.2% north in the last 60 days.

Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has rallied 34.5%.

The Zacks Consensus Estimate for KNSL’s 2023 earnings implies a year-over-year rise of 22.3%. The consensus mark has moved 0.9% north in the last 30 days.

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