If You Invested $1000 in Progressive a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Progressive (PGR) ten years ago? It may not have been easy to hold on to PGR for all that time, but if you did, how much would your investment be worth today?
Progressive's Business In-Depth
With that in mind, let's take a look at Progressive's main business drivers.
Based in Mayfield Village, OH, The Progressive Corporation is one of the major auto insurers in the country. Founded in 1965, Progressive is a leading independent agency writer of private passenger auto coverage, and the market share leader for the motorcycle products since 1998. Progressive operates through three business segments.
The Personal Lines (77% of 2023 Net Premium earned) segment writes insurance for private passenger automobiles, recreational and other vehicles. This business generally offers more than one program in a single state, with each program targeted toward a specific distribution channel, market, or customer group. Personal Lines products comprise insurance for personal autos and special lines products. The agency business includes business written by Progressive’s network of more than 35,000 independent insurance agencies located throughout the United States, as well as brokerages in New York and California and strategic alliance business relationships (other insurance companies, financial institutions, and national agencies). The direct business includes business written directly by the company online and over the phone.
The Commercial Lines (18%) segment writes primary liability and physical damage insurance for automobiles and trucks owned by small businesses. The majority of its Commercial Auto customers insure two or fewer vehicles. The Commercial Lines business, which is primarily distributed through the independent agency channel, operates in the business auto and specialty truck markets. The business auto market accounts for one third of its total Commercial Auto premiums and approximately 60% of the vehicles Progressive insures in this business. The remainder is in the specialty truck commercial auto market, which includes dump trucks, logging trucks, tow trucks, local cartage and other short-haul commercial vehicles.
The Property (5%) segment writes personal property insurance, for homeowners, other property owners, and renters, in the Agency channel in over 31 states and the District of Columbia for personal property insurance and in over four states for commercial property insurance.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Progressive, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in February 2014 would be worth $7,947.89, or a 694.79% gain, as of February 28, 2024, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 173.86% and the price of gold increased 47.31% over the same time frame in comparison.
Analysts are anticipating more upside for PGR.
Shares of Progressive have outperformed the industry over the past year. It continues to gain on higher premiums, given its compelling product portfolio, leadership position and strength in both Vehicle and Property businesses. Focus on becoming a one-stop insurance destination, catering to customers opting for a combination of home and auto insurance, augurs well for the company's growth. Policies in force and retention ratio should remain healthy. Competitive pricing to retain current customers and address customer needs with new offerings should continue to drive policy life expectancy. However, exposure to catastrophe losses induces underwriting volatility. Escalating expenses due to higher losses and settlement expenses remain an overhang on the margin. High debt level along with low times earned interest pose financial risk.
The stock has jumped 6.94% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 11 higher, for fiscal 2024; the consensus estimate has moved up as well.
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The Progressive Corporation (PGR) : Free Stock Analysis Report
