Here's Why You Should Stay Invested in Progressive (PGR) Stock
The Progressive Corporation’s PGR compelling product portfolio, leadership position, strength in Vehicle and Property businesses, healthy policies in force and retention bode well for growth. These, along with favorable growth estimates, make it worth retaining in one’s portfolio.
Progressive has a VGM Score of B. This score helps to identify stocks with the most attractive value, growth and momentum.
Zacks Rank & Price Performance
Progressive currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 30.9%, outperforming the industry’s increase of 8.6%.
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Optimistic Growth Projections
The Zacks Consensus Estimate for PGR’s 2023 earnings is pegged at $6.54, indicating a 52.2% increase from the year-ago reported figure on 10.9% higher revenues of $56.3 billion.
Long-term earnings growth is currently expected to be 15.8%, better than the industry average of 8.5%. PGR has a Growth Score of B. This style score identifies the growth prospects of a company.
Business Tailwinds
Progressive is the largest seller of motorcycle policies, a market leader in commercial auto insurance and one of the top 15 homeowner carriers based on premiums written. Net premiums written grew 11% in the last 10 years and surpassed the industry average of 4%. A compelling product portfolio, leadership position, healthy policies in force, better pricing and a solid retention ratio should help the company retain its momentum.
Policy life expectancy (“PLE”), a measure of customer retention, has been exhibiting improvement over the last few years across all the business lines. Strategic initiatives aimed at providing consumers with a distinctive new auto insurance option should help Progressive maintain its solid PLE. The insurer thus has been focusing on cross-selling home with auto insurance.
Banking on prudent underwriting, PGR’s combined ratio averaged less than 93% in a decade as well as compared favorably with the industry average combined ratio of more than 100%.
Banking on operational excellence, Progressive has been paying dividends uninterruptedly since 1971 and has a 25-million share buyback program under its authorization, aimed at enhancing shareholders’ value.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are W.R. Berkley Corporation WRB, Berkshire Hathaway (BRK.B) and American Financial Group, Inc. AFG. While W.R. Berkley sports a Zacks Rank #1 (Strong Buy), Berkshire Hathaway and American Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of W.R. Berkley surpassed earnings estimates in each of the last four quarters, the average beat being 25.63%. In the past year, the insurer has gained 26.9%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 2.4% north, respectively, in the past 30 days.
Berkshire Hathaway delivered a four-quarter average earnings surprise of 22.18%. In the past year, Berkshire Hathaway has gained 9%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings implies a respective increase of 15% and 6.2% from the year-ago reported number.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 0.4%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 0.6% and 1.8% north, respectively, in the past seven days.
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W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
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The Progressive Corporation (PGR) : Free Stock Analysis Report
American Financial Group, Inc. (AFG) : Free Stock Analysis Report
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