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Progressive (PGR) Stock Rises 19% YTD: Will the Rally Last?
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Shares of The Progressive Corporation (PGR - Free Report) have rallied 19.4% year to date, outperforming 13.8% and 4.3% growth of the industry and the Zacks S&P 500 composite, respectively. The Finance sector has decreased 0.4% in the same time frame. With a market capitalization of $111.4 billion, the average volume of shares traded in the last three months was 2.2 million.
A compelling portfolio, leadership position, strength in Vehicle and Property businesses, healthy policies in force, retention and solid capital position continue to drive this Zacks Rank #1 (Strong Buy) insurer. The Zacks Consensus Estimate for 2024 and 2025 earnings has moved north by 2.6% and 1.1% in the past seven days, respectively, reflecting analysts’ optimism. Progressive has a VGM Score of B.
PGR’s trailing 12-month return on equity is 21.1%, ahead of the industry average of 7.2%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders fund. Its return on invested capital of 14.1% outperforms the industry average of 5%. This reflects PGR’s efficiency in utilizing funds to generate income.
This largest seller of motorcycle and boat policies has a decent surprise history, having delivered an earnings surprise in two of the last four reported quarters while missing in the remaining two. Earnings of this insurer rose 5.9% in the last five years.
Growth Drivers
The Zacks Consensus Estimate for Progressive’s 2024 earnings is pegged at $8.88 per share, indicating an increase of 45.3% on 15.5% higher revenues of $71.3 billion. The consensus estimate for 2025 earnings is pegged at $10.38 per share, indicating an increase of 17% on 12.6% higher revenues of $80.5 billion.
The long-term earnings growth rate is currently pegged at 21.7%, better than the industry average of 11.5%. We expect the 2025 bottom line to increase at a three-year CAGR of 24.9%. It has a Growth Score of A.
Its compelling product portfolio, leadership position, healthy policies in force, better pricing and a solid retention ratio should help PGR continue to deliver improved premiums. We estimate 2025 net written premiums to increase at a three-year CAGR of 11.3%.
Policy life expectancy (PLE), a measure of customer retention, has improved in the last few years across all business lines. Strategic initiatives to provide consumers with a distinctive new auto insurance option along with competitive pricing should help Progressive deliver solid PLE. The insurer has been focusing on cross-selling homes with auto insurance.
PGR’s prudent underwriting has helped it deliver a combined ratio averaging less than 96% over a decade. The ratio compares favorably with the industry average of more than 100%.
Banking on operational excellence, PGR engages in capital payout. Progressive has been paying dividends uninterruptedly since 1971, yielding 0.5%, better than the industry average of 0.3%. Notably, its free cash flow conversion has remained more than 100% in the last many quarters, reflecting its solid earnings.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Mercury General Corporation (MCY - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . While Axis Capital and Mercury General sport a Zacks Rank #1 each at present, Arch Capital carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. Year to date, the insurer has gained 11.5%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $10.10 and $11.07, respectively, indicating a year-over-year increase of 2.5% and 9.6%.
Mercury General beat estimates in three of the last four quarters and matched in one, the average being 3,417.48%. Year to date, the insurer has rallied 36.1%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $2.90 and $3.90, indicating a year-over-year rise of 866.67% and 34.48%, respectively.
Arch Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 27.32%. Year to date, ACGL has jumped 14.9%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 revenues is pegged at $15.52 billion and $16.93 billion, indicating a year-over-year increase of 15% and 9%, respectively.
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Progressive (PGR) Stock Rises 19% YTD: Will the Rally Last?
Shares of The Progressive Corporation (PGR - Free Report) have rallied 19.4% year to date, outperforming 13.8% and 4.3% growth of the industry and the Zacks S&P 500 composite, respectively. The Finance sector has decreased 0.4% in the same time frame. With a market capitalization of $111.4 billion, the average volume of shares traded in the last three months was 2.2 million.
A compelling portfolio, leadership position, strength in Vehicle and Property businesses, healthy policies in force, retention and solid capital position continue to drive this Zacks Rank #1 (Strong Buy) insurer. The Zacks Consensus Estimate for 2024 and 2025 earnings has moved north by 2.6% and 1.1% in the past seven days, respectively, reflecting analysts’ optimism. Progressive has a VGM Score of B.
PGR’s trailing 12-month return on equity is 21.1%, ahead of the industry average of 7.2%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders fund. Its return on invested capital of 14.1% outperforms the industry average of 5%. This reflects PGR’s efficiency in utilizing funds to generate income.
This largest seller of motorcycle and boat policies has a decent surprise history, having delivered an earnings surprise in two of the last four reported quarters while missing in the remaining two. Earnings of this insurer rose 5.9% in the last five years.
Growth Drivers
The Zacks Consensus Estimate for Progressive’s 2024 earnings is pegged at $8.88 per share, indicating an increase of 45.3% on 15.5% higher revenues of $71.3 billion. The consensus estimate for 2025 earnings is pegged at $10.38 per share, indicating an increase of 17% on 12.6% higher revenues of $80.5 billion.
The long-term earnings growth rate is currently pegged at 21.7%, better than the industry average of 11.5%. We expect the 2025 bottom line to increase at a three-year CAGR of 24.9%. It has a Growth Score of A.
Its compelling product portfolio, leadership position, healthy policies in force, better pricing and a solid retention ratio should help PGR continue to deliver improved premiums. We estimate 2025 net written premiums to increase at a three-year CAGR of 11.3%.
Policy life expectancy (PLE), a measure of customer retention, has improved in the last few years across all business lines. Strategic initiatives to provide consumers with a distinctive new auto insurance option along with competitive pricing should help Progressive deliver solid PLE. The insurer has been focusing on cross-selling homes with auto insurance.
PGR’s prudent underwriting has helped it deliver a combined ratio averaging less than 96% over a decade. The ratio compares favorably with the industry average of more than 100%.
Banking on operational excellence, PGR engages in capital payout. Progressive has been paying dividends uninterruptedly since 1971, yielding 0.5%, better than the industry average of 0.3%. Notably, its free cash flow conversion has remained more than 100% in the last many quarters, reflecting its solid earnings.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Mercury General Corporation (MCY - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . While Axis Capital and Mercury General sport a Zacks Rank #1 each at present, Arch Capital carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. Year to date, the insurer has gained 11.5%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $10.10 and $11.07, respectively, indicating a year-over-year increase of 2.5% and 9.6%.
Mercury General beat estimates in three of the last four quarters and matched in one, the average being 3,417.48%. Year to date, the insurer has rallied 36.1%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $2.90 and $3.90, indicating a year-over-year rise of 866.67% and 34.48%, respectively.
Arch Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 27.32%. Year to date, ACGL has jumped 14.9%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 revenues is pegged at $15.52 billion and $16.93 billion, indicating a year-over-year increase of 15% and 9%, respectively.