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Should Value Investors Buy Progressive (PGR) Stock?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Progressive (PGR - Free Report) is a stock many investors are watching right now. PGR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 12.87. This compares to its industry's average Forward P/E of 27.20. Over the past year, PGR's Forward P/E has been as high as 15.53 and as low as 12.04, with a median of 13.92.

We also note that PGR holds a PEG ratio of 2.15. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PGR's industry has an average PEG of 3.30 right now. Over the last 12 months, PGR's PEG has been as high as 2.15 and as low as 1.64, with a median of 1.90.

Finally, we should also recognize that PGR has a P/CF ratio of 11.39. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. PGR's P/CF compares to its industry's average P/CF of 15.10. Over the past 52 weeks, PGR's P/CF has been as high as 14.95 and as low as 9.14, with a median of 12.16.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Progressive is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, PGR feels like a great value stock at the moment.


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