We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Progressive (PGR) is a Top Dividend Stock Right Now: Should You Buy?
Read MoreHide Full Article
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Progressive in Focus
Progressive (PGR - Free Report) is headquartered in Mayfield Village, and is in the Finance sector. The stock has seen a price change of 25.24% since the start of the year. The insurer is currently shelling out a dividend of $2.61 per share, with a dividend yield of 3.46%. This compares to the Insurance - Property and Casualty industry's yield of 1.53% and the S&P 500's yield of 1.87%.
Looking at dividend growth, the company's current annualized dividend of $2.61 is up 132% from last year. Over the last 5 years, Progressive has increased its dividend 4 times on a year-over-year basis for an average annual increase of 22.31%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Progressive's current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PGR expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $5.17 per share, which represents a year-over-year growth rate of 16.97%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that PGR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Progressive (PGR) is a Top Dividend Stock Right Now: Should You Buy?
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Progressive in Focus
Progressive (PGR - Free Report) is headquartered in Mayfield Village, and is in the Finance sector. The stock has seen a price change of 25.24% since the start of the year. The insurer is currently shelling out a dividend of $2.61 per share, with a dividend yield of 3.46%. This compares to the Insurance - Property and Casualty industry's yield of 1.53% and the S&P 500's yield of 1.87%.
Looking at dividend growth, the company's current annualized dividend of $2.61 is up 132% from last year. Over the last 5 years, Progressive has increased its dividend 4 times on a year-over-year basis for an average annual increase of 22.31%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Progressive's current payout ratio is 50%, meaning it paid out 50% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PGR expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $5.17 per share, which represents a year-over-year growth rate of 16.97%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that PGR is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).