Progressive (PGR) Stock Up 25% YTD: Will the Bull Run Continue?
Shares of The Progressive Corporation PGR have rallied 24.9% year to date compared with the industry’s increase of 5.2%. The Finance sector and the Zacks S&P 500 composite declined 13.4% and 17%, respectively, in the same time frame. With a market capitalization of $75 billion, the average volume of shares traded in the last three months was about 2.5 million.
An attractive product portfolio, leadership position, strength in Vehicle and Property businesses, healthy policies in force, retention and solid capital position continue to drive this Zacks Rank #3 (Hold) insurer.
The Zacks Consensus Estimate for 2023 has moved 0.6% north in the past seven days, reflecting analyst’s optimism.
Progressive has an impressive VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
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Can PGR Retain the Momentum?
The Zacks Consensus Estimate for Progressive’s 2023 earnings is pegged at $6.65, indicating an increase of 62.7% on 10.3% higher revenues of $56.5 billion. The long-term earnings growth rate is currently pegged at 18.9%, better than the industry average of 9.7% PGR has a Growth Score of B. This style score identifies the growth prospects of a company.
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 increased 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 improved in the last few years across all the business lines. Strategic initiatives to provide consumers with a distinctive new auto insurance option should help Progressive retain its momentum. The insurer thus has been focusing on cross-selling homes with auto insurance.
Banking on prudent underwriting, PGR’s combined ratio averaged less than 93% in a decade and compared favorably with the industry average combined ratio of more than 100%.
PGR’s operational excellence supports a solid capital position that enhances shareholders’ value. Progressive has been paying dividends uninterruptedly since 1971 and has a 25-million share buyback program under its authorization.
Stocks to Consider
Some other top-ranked stocks from the insurance industry are MGIC Investment Corporation MTG, Root, Inc. ROOT and W.R. Berkley Corporation WRB, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
MGIC Investment’s earnings surpassed estimates in each of the last four quarters, the average being 36.34%. In the past year, MGIC Investment has lost 6.7%.
The Zacks Consensus Estimate for MTG’s 2022 and 2023 earnings has moved 12.1% and 0.4% north, respectively, in the past 60 days.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 91.1%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.
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 34.3%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 3.4% north, respectively, in the past 60 days.
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MGIC Investment Corporation (MTG) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
Root, Inc. (ROOT) : Free Stock Analysis Report
