U.S. Markets closed

Did The Progressive Corporation's (NYSE:PGR) Recent Earnings Growth Beat The Trend?

Simply Wall St

For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at The Progressive Corporation's (NYSE:PGR) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.

Check out our latest analysis for Progressive

How PGR fared against its long-term earnings performance and its industry

PGR's trailing twelve-month earnings (from 30 June 2019) of US$3.2b has jumped 46% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 22%, indicating the rate at which PGR is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only because of an industry uplift, or if Progressive has experienced some company-specific growth.

NYSE:PGR Income Statement, September 15th 2019

In terms of returns from investment, Progressive has invested its equity funds well leading to a 24% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.6% exceeds the US Insurance industry of 2.5%, indicating Progressive has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Progressive’s debt level, has increased over the past 3 years from 8.0% to 23%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While Progressive has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Progressive to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for PGR’s future growth? Take a look at our free research report of analyst consensus for PGR’s outlook.
  2. Financial Health: Are PGR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.