Progressive (PGR) February Earnings and Revenues Rise Y/Y

The Progressive Corporation PGR reported earnings per share of $1.24 for February 2024, which jumped nearly five-fold year over year. The improvement stemmed from higher revenues, net realized gain on securities and investment income, partially offset by an increase in expenses.

February Numbers in Detail

Progressive recorded net premiums written of $5.7 billion, down 5.5% from $6 billion reported in the year-ago month. Net premiums earned were about $5.1 billion, up 23.1% from $4.1 billion reported in the year-ago month.

Net realized gain on securities was $80.7 million against the year-over-year loss of $117.1 million.

The combined ratio — the percentage of premiums paid out as claims and expenses — improved 830 basis points (bps) year over year to 86.8.

PGR’s operating revenues were $5.4 billion, up 7.8% year over year. The improvement was due to a 23.1% increase in premiums, a 55.4% jump in investment income, 6.2% higher fees and other revenues and a 4% rise in service fees.

Total expenses increased 12% to $4.57 billion, largely due to a rise of 12.4% in losses and loss adjustment expenses, 9.1% in other underwriting expenses, 14.5% in policy acquisition costs, 1.4% in service expenses and 10.4% in interest expenses.

In February, policies in force (PIF) were impressive for both Vehicle and Property businesses. In its Vehicle business, the Personal Auto segment’s PIF increased 7% year over year to 20 million. Special Lines increased 7% from the year-earlier month to 6 million policies.

In Progressive’s Personal Auto segment, Agency Auto PIF increased 5% to 8.46 million, while Direct Auto improved 7% to 11.5 million.

PGR’s Commercial Auto segment PIF rose 4% year over year to 1 million policies. The Property business had 3.16 million policies in force in the reported month, up 10% year over year.

The company’s book value per share was $35.54 as of Feb 29, 2024, up 30% from $27.32 as of Feb, 2023.

In the trailing 12 months, the return on equity was positive 31.3% in February 2024 compared with negative 6% in February 2023. The debt-to-total-capital ratio improved 300 bps year over year to 24.9 as of Feb 29, 2024.

Price Performance

Shares of Progressive have rallied 47.3% over the past year compared with the industry’s growth of 33.8%.

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Zacks Rank

PGR currently sports a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Some other top-ranked stocks from the same space are Axis Capital Holdings Limited AXS, HCI Group, Inc. HCI and Palomar Holdings, Inc. PLMR, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Axis Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. In the past year, AXS has gained 18.6%.

The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings per share is pegged at $10.15 and $11.17, indicating a year-over-year increase of 3% and 10%, respectively.

HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, HCI has gained 10.3%.

The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings per share is pegged at $10.22 and $11.41, indicating a year-over-year increase of 37.9% and 11.6%, respectively.

Palomar has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, PLMR has rallied 54.5%.

The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings per share is pegged at $4.29 and $5.06, indicating a year-over-year increase of 16.2% and 18%, respectively.

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

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