Progressive Corp

PGR

Fire, Marine & Casualty Insurance

Mkt Cap

$120.2B

PE

20.95

Debt

Cash

$167.9M

EV

$120.1B

FCF

$12.17B

Market Cap

$120.2B

P/E Ratio

20.95

Debt

Cash

$167.9M

EV

$120.1B

FCF

$12.17B

Charts data: {"Earnings":[{"time":"2014-12-30","value":1281000000},{"time":"2015-12-30","value":1267600000},{"time":"2016-12-30","value":1031000000},{"time":"2017-12-30","value":1592200000},{"time":"2018-12-30","value":2593900000},{"time":"2019-12-30","value":3943400000},{"time":"2020-12-30","value":5677700000},{"time":"2021-12-30","value":3324000000},{"time":"2022-12-30","value":694600000},{"time":"2023-12-30","value":3864800000}],"Sales":[{"time":"2014-12-30","value":19391400000},{"time":"2015-12-30","value":20853800000},{"time":"2016-12-30","value":23441400000},{"time":"2017-12-30","value":26839000000},{"time":"2018-12-30","value":31979000000},{"time":"2019-12-30","value":39022300000},{"time":"2020-12-30","value":42658100000},{"time":"2021-12-30","value":47702000000},{"time":"2022-12-30","value":49610700000},{"time":"2023-12-30","value":62108500000}],"Net Margins":[{"time":"2014-12-30","value":0.06606021225904267},{"time":"2015-12-30","value":0.06078508473275854},{"time":"2016-12-30","value":0.043982014726082916},{"time":"2017-12-30","value":0.05932411788814784},{"time":"2018-12-30","value":0.0811126051471278},{"time":"2019-12-30","value":0.10105503776046004},{"time":"2020-12-30","value":0.133097817296129},{"time":"2021-12-30","value":0.0696826128883485},{"time":"2022-12-30","value":0.01400101187848589},{"time":"2023-12-30","value":0.062226587343117284}],"Assets":[{"time":"2014-12-30","value":25787600000},{"time":"2015-12-30","value":29819300000},{"time":"2016-12-30","value":33427500000},{"time":"2017-12-30","value":38701200000},{"time":"2018-12-30","value":46575000000},{"time":"2019-12-30","value":54895300000},{"time":"2020-12-30","value":64098300000},{"time":"2021-12-30","value":71132300000},{"time":"2022-12-30","value":75465000000},{"time":"2023-12-30","value":88690800000}],"Stockholders Equity":[{"time":"2014-12-30","value":6928600000},{"time":"2015-12-30","value":7289400000},{"time":"2016-12-30","value":7957100000},{"time":"2017-12-30","value":9284800000},{"time":"2018-12-30","value":10821800000},{"time":"2019-12-30","value":13673200000},{"time":"2020-12-30","value":17038600000},{"time":"2021-12-30","value":18231600000},{"time":"2022-12-30","value":15891000000},{"time":"2023-12-30","value":20277100000}],"ROE":[{"time":"2014-12-30","value":0.18488583552232773},{"time":"2015-12-30","value":0.1738963426345104},{"time":"2016-12-30","value":0.12956981814982846},{"time":"2017-12-30","value":0.17148457694296054},{"time":"2018-12-30","value":0.23969210297732355},{"time":"2019-12-30","value":0.28840359242898517},{"time":"2020-12-30","value":0.33322573450870374},{"time":"2021-12-30","value":0.18232080563417363},{"time":"2022-12-30","value":0.043710276257000816},{"time":"2023-12-30","value":0.1905992474269003}],"ROA":[{"time":"2014-12-30","value":0.07849896849648669},{"time":"2015-12-30","value":0.06866693718497752},{"time":"2016-12-30","value":0.048211801660309625},{"time":"2017-12-30","value":0.05922296983039286},{"time":"2018-12-30","value":0.07149973161567365},{"time":"2019-12-30","value":0.09745825234582924},{"time":"2020-12-30","value":0.11529478940939152},{"time":"2021-12-30","value":0.062258636371943545},{"time":"2022-12-30","value":0.015445570794408003},{"time":"2023-12-30","value":0.058316082389605235}]}

The Progressive Corporation, an insurance holding company, provides personal and commercial auto, personal residential and commercial property, general liability, and other specialty property-casualty insurance products and related services in the United States. It operates in three segments: Personal Lines, Commercial Lines, and Property. The Personal Lines segment writes insurance for personal autos and recreational vehicles (RV). This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, snowmobiles, and related products. The Commercial Lines segment provides auto-related liability and physical damage insurance, and business-related general liability and property insurance for autos, vans, pick-up trucks, and dump trucks used by small businesses; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and long-haul operators; dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, garbage/debris removal, and coal-type businesses; and tow trucks and wreckers used in towing services and gas/service station businesses; as well as non-fleet and airport taxis, and black-car services. The Property segment writes residential property insurance for homeowners, other property owners, and renters, as well as offers manufactured homes, personal umbrella insurance, and primary and excess flood insurance. The company offers policy issuance and claims adjusting services; and acts as an agent to homeowners, general liability, workers' compensation insurance, and other products. It also provides reinsurance services. The company sells its products through independent insurance agencies, as well as through mobile applications and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield Village, Ohio.

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DCF

Discounted Cash Flow Valuation of Progressive Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$12.17B	$14.56B	$17.18B	$19.99B	$22.93B	$25.94B	$28.92B	$31.78B	$34.4B	$36.68B	$38.51B	$385.1B
DCF		$12.66B	$12.99B	$13.14B	$13.11B	$12.9B	$12.5B	$11.95B	$11.25B	$10.43B	$9.52B	$95.2B
Value	$215.6B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 9.1%

Earnings Stability 12%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	6.1%	4.4%	5.9%	8.1%	10%	13%	7%	1.4%	6.2%	8.8%
ROA	6.9%	4.8%	5.9%	7.1%	9.7%	12%	6.2%	1.5%	5.8%	8%
ROE	17%	13%	17%	24%	29%	33%	18%	4.4%	19%	26%

What is the average Net Margin?

The average Net Margin over the past 5 years is +7.69%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -1.2%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +7%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -1.04%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +21.3%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -3.23%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	1.26	1.28	0.93	0.74	0.75	0.89	0.66	0.98	0.67	0.00
Debt Equity	0.37	0.40	0.36	0.41	0.33	0.35	0.27	0.41	0.34	0.00
MIN
Graham Stability	-	-	100%	100%	100%	100%	82%	16%	100%	16%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 0.00.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 0.00.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.16.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	15%	14%	13%	25%	0.5%
Net Income	21%	8.3%	-12%	460%	24%
Stockholders Equity	14%	13%	6%	28%	0.2%
FCF	23%	12%	16%	58%	-1.7%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +14.2%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.5%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +8.3%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +23.96%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +13.38%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +0.2%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +11.54%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -1.71%.