PGR (PROGRESSIVE CORP)
- P/E: 21.7
- GAAP DILUTED YEAR-OVER-YEAR EPS GROWTH LAST QUARTER: $.25
- SECTOR: FINANCE
- ASSETS-LIABILITIES: 1.35
- DIVIDEND: 1.53%
Progressive is an insurance
company founded in 1937. Up 25% YTD, PGR will report earnings in mid
July, looking to extend the streak. PGR dispenses its 1.53% dividend
in one large yearly chunk.
Progressive managed to
increase underwriting margin by approximately 60% while increasing
total revenue by 13% on a year-over-year basis. While the company
claims to have more assets than liabilities, it has less than 8% of
its debt in cash. However, because Progressive makes money by
investing its revenue from premiums, it would lose profit capability
by having the majority of its funds in cash. The revenue earned from
premiums is nearly 60 times the company's investment income, which is
concentrated in company debt securities and government obligations.
While EPS has beat Wall Street expectations 6 out of the last 9
quarters, revenue has missed expectations all but twice.
Tricia Griffith has been
the company's CEO for roughly one year. She started with the company
as a claims representative in 1988. According to repairerdrivennews,
PGR, the 4th largest insurance provider, grew at a faster rate than
#3 Allstate last year. With most of its investments in government
securities, the company will also benefit from recently increased
rates. Progressive's snapshot program has met some criticism, as has
the company's policy of outsourcing home and renter's insurance to
third parties.
PGR trades at a premium to
ALL with a lower dividend, and Geico is not comparable because it is
a subsidiary of Berkshire Hathaway. It is more expensive than the
average insurance stock, and has a comparable revenue growth rate.
In 2017, it has grown 5% more than ALL, its closest competitor, and
will look to report earnings in 7/2017 that continue to propel
expectations higher.
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