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Reasons Why Investors Should Buy Progressive (PGR) Stock

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Progressive Corporation (PGR - Free Report) is well-poised for growth, given its competitive pricing, expanded product offerings and efficient capital deployment. The stock carries a VGM Score of A. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.

Estimates for Progressive have been revised upward over the past seven days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2019 earnings per share has moved up 0.2% in the said time frame. The company also has a decent history of beating estimates in three of the last four quarters with the average being 7.49%.

Shares of Progressive have rallied 28.1% year to date, outperforming the industry’s increase of 6.1%.


Progressive’s return on equity was 28.1% in the trailing 12-month period, higher than the industry average of 6.8%. Return on equity is a profitability measure that identifies a company’s efficiency in utilizing its shareholders’ funds.

Progressive holds a leadership position in product, service and distribution innovation and is one of the major auto insurers in the country. The company should continue to benefit from compelling multi-product offerings and competitive rates in all markets.

Management also remains focused on customer retention. The company intends to provide distinctive new auto insurance options to retain customers. Policy life expectancy (PLE), a measure for customer retention, witnessed improvement over the last few years. It is expected that competitive pricing and new product offerings will enhance PLE in the upcoming quarters. The company is also cross-selling auto policies and Progressive Home Advantage.

This Zacks Rank #2 (Buy) property and casualty insurer’s sound financial position aids in efficient capital deployment. Its dividend yield of 0.5% betters the industry average of 0.4%. The company has 25 million shares remaining under its buyback authorization.

The Zacks Consensus Estimate for 2019 and 2020 earnings per share is pegged at $5.40 and $5.63, indicating increase of nearly 22.2% and 4.3%, respectively from the year-ago reported figure. The expected long-term earnings growth rate is 7.3%. It has a favorable Growth Score of A. This style score identifies growth prospects of a company.

The stock also carries a favorable Value Score of B. Back-tested results show that stocks with Value Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 are best investment options.

Other Stocks to Consider

Some other top-ranked stocks from the space include Hallmark Financial Services (HALL - Free Report) , Palomar Holdings (PLMR - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hallmark Financial underwrites markets, distributes and services property and casualty insurance products in the United States. The company came up with average four-quarter positive surprise of 97.50%.

Palomar Holdings provides personal and commercial specialty property insurance products. The company delivered average four-quarter positive surprise of 25.00%.

Arch Capital provides property, casualty, and mortgage insurance and reinsurance products on a global basis. It pulled off an average four-quarter beat of 14.36%.

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