5. The Progressive Corporation (NYSE:PGR)
TTM Net Income: $6.89 Billion
5-Year Net Income CAGR: 16.24%
Number of Hedge Fund Holders: 89
The Progressive Corporation (NYSE:PGR) is an American insurance company that ranks among the top 5 on our list of the 8 most profitable large-cap stocks to invest in. The company offers various types of insurance, including car, home, and commercial coverage. It is the second-largest personal auto insurer in the US. The corporation is also a leading seller of commercial auto, motorcycle, and boat insurance.
During the second quarter, The Progressive Corporation (NYSE:PGR) continued to invest in enhancing its commercial auto and business owners’ policy (BOP) products. The company rolled out a new commercial auto product model in two additional states and is on track to introduce it to 14 states by year-end. Currently, the BOP product is available in 46 states, with a new model launched in four states, bringing the total to 22. Additionally, The Progressive Corporation (NYSE:PGR) launched a pilot program of its new multi-product quoting system for agents, allowing them to quote both commercial auto and BOP products seamlessly, with plans for further expansion in the coming months.
The company delivered impressive second-quarter 2024 results. The Progressive Corporation (NYSE:PGR) reported a remarkable 22% increase in net premiums written year-over-year and a combined ratio of 91.9, indicating robust profitability despite significant weather-related challenges. Policies in force (PIF) were up 9% year-over-year.
With personal auto policies growing by 1.1 million since the first quarter of 2024, the corporation has successfully added 2 million policies in the first half of 2024.
The Progressive Corporation (NYSE:PGR) also experienced strong growth in its Personal Lines segment in the second quarter of 2024. The company reported net premiums written of $14.6 billion, marking a 26% increase compared to the same quarter last year. This growth was driven by a surge in new business applications, resulting in nearly 28 million policies in force by the end of the quarter.
Over the past 5 years, The Progressive Corporation (NYSE:PGR) has grown its net income at a compound annual growth rate (CAGR) of 16.24%, while its levered free cash flow has increased at a CAGR of 11.13% during the same period. Overall, the corporation’s performance reflects healthy profitability and a robust demand for its insurance offerings.
According to Insider Monkey’s Q2 database of over 900 hedge funds, 89 hedge funds held stakes in The Progressive Corporation (NYSE:PGR). Middle Coast Investing stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q3 2024 investor letter:
“Progressive Insurance (NYSE:PGR) is the best example of both a macro and micro transition. Used car repair cost inflation (macro) hurt its profitability. It was early in raising prices to deal with that, and has been growing new policies in force much faster than competitors. As it has overcome the cost inflation issue, its profits have soared, and should continue to grow. The stock price has doubled in the last 14 months.”
