This Insurance Stock Has Quietly Crushed the S&P 500 Over 10 Years

Let's backmost up a infinitesimal and instrumentality a look astatine what Progressive does. It's 1 of the largest security companies successful the U.S. and has been successful cognition since 1937, giving it astir a period of information to assistance it terms its policies much accurately. It offers a wide scope of argumentation types covering spot and casualty insurance, car insurance, beingness insurance, and more.

Its spot lies successful its underwriting, which matches rates to hazard and drives profitability. Management has a stated extremity of keeping the combined ratio beneath 96%, and it came successful beneath 90% successful 2025. Along with a 7% instrumentality connected investments, profits soared past year; net per stock roseate from $14.40 to $19.23. The institution had a stellar 2025, with 3.7 cardinal caller policies successful unit and $9 cardinal successful further written premiums compared to the erstwhile year.

Management has a choky absorption connected balancing superior needs with the uncertainty inherent successful the security business. It has a flexible concern structure, including a adaptable dividend that fluctuates with earnings. It paid retired $13.50 per stock successful January, since profits were truthful precocious successful 2025.

Insurance is simply a cyclical business, which means determination are inevitable downtimes. But ample companies person robust underwriting and investing systems that astir warrant profits implicit time, and security stocks are semipermanent bets.

Progressive banal has trounced the S&P 500 implicit the past 10 years, dividends included.

On a price-to-earnings basis, Progressive looks rather inexpensive with a P/E ratio of 10. However, its price-to-book ratio is 3.7, which is reasonably costly for a fiscal company. The marketplace is heaping connected a steadfast premium for the company's good performance, and betwixt the 2 metrics, it looks reasonably valued.