Progressive Corp. (PGR - Free Report) has declared a special cash dividend of $1.00 per share in order to share its strong operating and investment results with the shareholders. The dividend will be paid on November 29, 2012 to shareholders of record as of November 21, 2012.
Progressive Corp. believes in regularly returning capital to its shareholders. The company pays a lump sum annual dividend, which is calculated on the basis of its operating performance. This special dividend will be paid in addition to Progressive Corp.’s annual cash dividend, which is usually declared in the month of December every year and paid in January.
The special dividend will allow Progressive Corp. to return about $600 million to shareholders. Based on the company’s closing share price of $22.20 on October 12, 2012, when the dividend was declared, the special dividend implies a dividend yield of 4.5%.
The special dividend was declared on the back of Progressive Corp.’s impressive operating performance in the third quarter of 2012. The company’s earnings per share for the third quarter of 2012 were 46 cents, surging nearly 92% from 24 cents in the year-ago quarter. Results outpaced the Zacks Consensus Estimate of 26 cents. Net income shot up 84% from the third quarter of 2011 to $277.0 million in the reported quarter.
Concurrently, Progressive Corp. announced the selection of Jeffrey D. Kelly as a member of its board of directors. Mr. Kelly has prior experience as the company’s board member since he served the board from 2000 to 2009. He has also served as the Executive Vice President and Chief Financial Officer of RenaissanceRe Holdings Ltd. (RNR - Free Report) and Vice Chairman and Chief Financial Officer of National City Corporation.
Progressive Corp. carries a Zacks #3 Rank (short-term Hold rating). We maintain a long-term ‘Underperform’ recommendation on the stock.