Head to Head Survey: Cincinnati Financial (NASDAQ:CINF) versus The Progressive (NYSE:PGR)

The Progressive (NYSE:PGR) and Cincinnati Financial (NASDAQ:CINF) are both large-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Risk and Volatility

The Progressive has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Cincinnati Financial has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Valuation and Earnings

This table compares The Progressive and Cincinnati Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Progressive $39.02 billion 1.40 $3.97 billion $6.72 13.86
Cincinnati Financial $7.92 billion 1.57 $2.00 billion $4.20 18.43

The Progressive has higher revenue and earnings than Cincinnati Financial. The Progressive is trading at a lower price-to-earnings ratio than Cincinnati Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

The Progressive pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Cincinnati Financial pays an annual dividend of $2.40 per share and has a dividend yield of 3.1%. The Progressive pays out 6.0% of its earnings in the form of a dividend. Cincinnati Financial pays out 57.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. The Progressive has raised its dividend for 1 consecutive years and Cincinnati Financial has raised its dividend for 38 consecutive years. Cincinnati Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

80.9% of The Progressive shares are held by institutional investors. Comparatively, 61.5% of Cincinnati Financial shares are held by institutional investors. 0.4% of The Progressive shares are held by company insiders. Comparatively, 7.4% of Cincinnati Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for The Progressive and Cincinnati Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Progressive 2 8 4 1 2.27
Cincinnati Financial 2 2 1 0 1.80

The Progressive currently has a consensus price target of $91.42, suggesting a potential downside of 1.85%. Cincinnati Financial has a consensus price target of $72.83, suggesting a potential downside of 5.90%. Given The Progressive’s stronger consensus rating and higher possible upside, research analysts clearly believe The Progressive is more favorable than Cincinnati Financial.

Profitability

This table compares The Progressive and Cincinnati Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Progressive 12.13% 28.66% 7.53%
Cincinnati Financial N/A 5.14% 1.88%

Summary

The Progressive beats Cincinnati Financial on 12 of the 18 factors compared between the two stocks.

The Progressive Company Profile

The Progressive Corporation, through its subsidiaries, provides personal and commercial auto insurance, residential property insurance, and other specialty property-casualty insurance and related services primarily in the United States. Its Personal Lines segment writes insurance for personal autos, and recreational and other vehicles. This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, and snowmobiles. The company's Commercial Lines segment provides auto-related primary 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 non-fleet long-haul operators; dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, and coal-type businesses; tow trucks and wreckers used in towing services and gas/service station businesses; and non-fleet taxis, black-car services, and airport taxis. Its Property segment provides residential property insurance for homes, condos, manufactured homes, and renters, as well as offers personal umbrella insurance, and primary and excess flood insurance. The company also offers policy issuance and claims adjusting services; home, condominium, renters, and other insurance; and business owner's policies, general liability, professional liability, and workers' compensation insurance. In addition, it offers reinsurance services. The Progressive Corporation sells its products and services through independent insurance agencies, as well as directly on Internet through mobile devices, and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield, Ohio.

Cincinnati Financial Company Profile

Cincinnati Financial Corporation, together with its subsidiary, provides property casualty insurance products in the United States. The company operates in five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments. The Commercial Lines Insurance segment offers coverage for commercial casualty, commercial property, commercial auto, and workers' compensation. It also provides director and officer liability insurance, contract and commercial surety bonds, and fidelity bonds; and machinery and equipment coverage. The Personal Lines Insurance segment offers personal auto insurance; homeowners insurance; and dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. The Excess and Surplus Lines Insurance segment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products; and commercial property insurance, which insures buildings, inventory, equipment, and business income from loss or damage due to various causes, such as fire, wind, hail, water, theft, and vandalism. The Life Insurance segment provides term life insurance products; universal life insurance products; worksite products, such as term life; and whole life insurance products, as well as markets deferred annuities and immediate annuities. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, and redeemable preferred stocks; and equity investments comprising common and nonredeemable preferred stocks. The company also offers commercial leasing and financing services; and insurance brokerage services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.

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