Progressive Corp Rewards Investors with New Buyback Plan
The board of directors of The Progressive Corporation PGR recently approved a new share buyback program in order to return more value to shareholders. The company is now authorized to repurchase 25 million shares.
Progressive undertakes share buybacks alongside paying annual dividends and special dividends. In the first quarter of 2017, the company repurchased 0.6 million shares for $35.86 million and has 6 million share remaining under the authorization as of Mar 31, 2017. The new share repurchases authorization replaces the one approved in 2011.
Progressive has sufficient liquidity, backed by solid operational performance, which supports buy backs. A lower share count due to share repurchases also adds to the bottom line. Given its financial strength, we expect more shares to be repurchased going forward.
In fact, the insurer exited the first quarter with cash of $214.5 million (up 5.2% year over year) and retained earnings of $5.5 billion (up 12% year over year). Cash from operations improved 36.6% year over year.
Shares of Progressive Corp. outperformed the Zacks categorized Property and Casualty Insurance industry year to date. While Progressive shares gained 12.59%, the industry registered an increase of 0.59%. We expect the company’s shareholder-friendly moves to drive the stock higher.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry include American Financial Group Inc. AFG, First American Financial Corporation FAF, and CNA Financial Corporation CNA.
American Financial Group primarily engages in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. The company had a positive earnings surprise of 23.36% in the last reported quarter. The stock flaunts a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
First American Financial provides financial services through its subsidiaries. The company posted a positive earnings surprise of 19.05% in the last reported quarter. The stock sports a Zacks Rank #1.
CNA Financial offers commercial P&C insurance products, mainly across the United States. The company posted a positive earnings surprise of 10.13% in the last reported quarter. The stock carries a Zacks Rank #2 (Buy).
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Progressive Corporation (The) (PGR): Free Stock Analysis Report
CNA Financial Corporation (CNA): Free Stock Analysis Report
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American Financial Group, Inc. (AFG): Free Stock Analysis Report
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