Markets

Progressive Corp: Initiatives Strong, Underwriting Results Suffer

On Dec 21, 2015, we issued an updated research report on Progressive Corp.PGR - a leading independent agency writer of private passenger auto coverage. This Zacks Rank #3 (Hold) company continually strives to enhance and innovate its products, services and distribution capabilities.

Progressive Corp. aims to become a one-stop insurance shopping destination and is thus leaving no stone unturned to penetrate customer households through cross-selling auto policies and its Progressive Home Advantage program.

Progressive Corp. continues to gain from its expanded multi-product offering, reflected through improving premiums. Customer retention is also in focus and the company strives to improve its policy life expectancy (a measure for customer retention) through differentiated products and services.

Moreover, the company prudently deploys capital that in turn enhances its shareholders' value. In addition to paying special dividend, over and above its regular dividend, the company also engages in share buyback activities. Progressive Corp. has also been consistently improving its leverage ratio.

However, the company's exposure to catastrophe events that hurt its underwriting results and a competitive market scenario keep us on the sidelines.

With respect to quarterly performance, the company's third-quarter earnings per share were 2.1% ahead of the Zacks Consensus Estimate. it is worth noting that this property and casualty insurer has delivered positive earnings surprises in three of the last four quarters, with an average beat of 12.15%.

The Zacks Consensus Estimate of earnings for 2015 and 2016 has decreased over the last 60 days. While the estimate moved south by a cent to $1.97 for 2015, the same inched up by a penny to $2.01 for 2016. The expected long-term earnings growth rate of the company is currently pegged at 9.5%.

Stocks to Consider

Some better-ranked property and casualty insurers are Cincinnati Financial Corp. CINF , RLI Corp. RLI and Hallmark Financial Services Inc. HALL . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

RLI CORP (RLI): Free Stock Analysis Report

CINCINNATI FINL (CINF): Free Stock Analysis Report

PROGRESSIVE COR (PGR): Free Stock Analysis Report

HALLMARK FINL (HALL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

HALL CINF PGR RLI

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More