April 25, 2025 a 03:31 am
PGR: Dividend Analysis - The Progressive Corporation
The Progressive Corporation exhibits a long-standing dividend history with over 40 years of consistent payments, showcasing its commitment to returning capital to shareholders. However, recent dividend growth has been negative, reflecting potential challenges in maintaining its previous growth pace. This necessitates a deeper analysis of financial indicators to determine stability and future prospects.
📊 Overview
The Progressive Corporation operates within the Financial Services sector with a current dividend yield of 1.71%. Offering a dividend per share of approximately 1.16 USD, it boasts a robust 40-year history of dividend payments. The company endured a dividend cut in 2022, which raises questions about its future consistency.
| Metric | Details |
|---|---|
| Sector | Financial Services |
| Dividend Yield | 1.71% |
| Current Dividend per Share | 1.1646 USD |
| Dividend History | 40 years |
| Last Cut or Suspension | 2022 |
🗣️ Dividend History
The history of dividends provides investors with insight into a company’s consistency in rewarding shareholders. Progressive's recent history shows a significant decline in dividends, requiring caution for income-focused investors.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 4.7 |
| 2024 | 1.15 |
| 2023 | 0.4 |
| 2022 | 0.4 |
| 2021 | 6.4 |
📈 Dividend Growth
The growth of dividends over time is crucial in assessing a company's ability to enhance shareholder value. Progressive's negative growth over the past five years indicates a contraction in dividend expansion, correlating with the recent cut.
| Time | Growth |
|---|---|
| 3 years | -0.44% |
| 5 years | -0.16% |
The average dividend growth is -0.16% over five years. This shows moderate but steady dividend growth decline.
📉 Payout Ratio
The payout ratio is a key metric indicating how much of net income is returned to shareholders in the form of dividends. Progressive's EPS-based payout ratio stands at 8.04% while the FCF-based payout ratio is 4.60%.
| Key figure | Ratio |
|---|---|
| EPS-based | 8.04% |
| Free cash flow-based | 4.60% |
The low payout ratios suggest that the company retains a significant portion of its earnings, which could indicate cautious management or reinvestment into the business.
✅ Cashflow & Capital Efficiency
Analyzing cash flow and capital efficiency provides insight into a company's operational health and its ability to sustain dividends. Steady cash flow is critical for consistent dividend payments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 10.57% | 11.15% | 8.65% |
| Earnings Yield | 6.04% | 4.19% | 0.95% |
| CAPEX to Operating Cash Flow | 1.89% | 2.37% | 4.26% |
| Stock-based Compensation to Revenue | 1.39% | 0.20% | 0.25% |
| Free Cash Flow / Operating Cash Flow Ratio | 98.11% | 97.63% | 95.74% |
The company demonstrates solid cash flow generation, as evidenced by the high free cash flow yield and efficient capital reinvestment ratio.
🔍 Balance Sheet & Leverage Analysis
A strong balance sheet with minimal leverage is critical for sustaining dividend payments during financial stress. Progressive's debt metrics are favorable, assisting in maintaining its dividend profile.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 26.94% | 33.97% | 41.06% |
| Debt-to-Assets | 6.52% | 7.77% | 9.29% |
| Debt-to-Capital | 21.22% | 25.36% | 29.11% |
| Net Debt to EBITDA | N/A | N/A | N/A |
| Current Ratio | N/A | N/A | N/A |
| Quick Ratio | N/A | N/A | 1.83 |
| Financial Leverage | 4.13 | 4.37 | 4.42 |
The favorable leverage ratios indicate prudent financial management, positioning the company well in terms of liquidity and debt servicing.
📈 Fundamental Strength & Profitability
Fundamental strength and profitability ratios provide an overall view of financial health and operational efficiency. High profitability supports consistent dividend payments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 33.14% | 19.25% | 4.54% |
| Return on Assets | 8.02% | 4.40% | 1.03% |
| Margins: Net | 96.77% | 6.28% | 1.46% |
| Margins: EBIT | 99.29% | 8.33% | 2.35% |
| Margins: EBITDA | N/A | N/A | N/A |
| Margins: Gross | 100% | 99.99% | 100% |
| R&D to Revenue | 0% | 0% | 0% |
High margins and substantial return metrics reinforce the company's profitability strength, although focus on innovation is minimal as indicated by zero R&D expenditure.
📉 Price Development
✅ Dividend Scoring System
| Criterion | Score (1-5) | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 2 | |
| Dividend Growth | 2 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 4 | |
| Cashflow Coverage | 5 | |
| Balance Sheet Quality | 4 |
Total Score: 28/40
🔍 Rating
The Progressive Corporation offers a solid yet slightly risky dividend profile. While the company showcases excellent financial stability and low payout ratios, recent declines in dividend growth raise caution. For those seeking stable income, considering Progressive within a diversified dividend portfolio might be prudent, but awareness of recent trends is essential.