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Should Value Investors Buy Progressive (PGR) Stock?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Progressive (PGR). PGR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 13.07, which compares to its industry's average of 25.26. Over the last 12 months, PGR's Forward P/E has been as high as 15.65 and as low as 11.75, with a median of 14.14.

Investors should also note that PGR holds a PEG ratio of 1.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PGR's PEG compares to its industry's average PEG of 3.02. Over the last 12 months, PGR's PEG has been as high as 2.13 and as low as 1.60, with a median of 1.93.

Finally, investors should note that PGR has a P/CF ratio of 12. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.79. Over the past 52 weeks, PGR's P/CF has been as high as 16.48 and as low as 10.37, with a median of 13.23.

Value investors will likely look at more than just these metrics, but the above data helps show that Progressive is likely undervalued currently. And when considering the strength of its earnings outlook, PGR sticks out at as one of the market's strongest value stocks.


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