Analyzing Progressive (NYSE:PGR) and Stewart Information Services (NYSE:STC)

Progressive (NYSE:PGR) and Stewart Information Services (NYSE:STC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Earnings and Valuation

This table compares Progressive and Stewart Information Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Progressive	$85.17 billion	1.49	$8.48 billion	$18.23	11.91
Stewart Information Services	$2.80 billion	0.71	$73.31 million	$3.59	19.88

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

Analyst Ratings

This is a summary of current recommendations and price targets for Progressive and Stewart Information Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Progressive	1	11	8	0	2.35
Stewart Information Services	0	1	2	0	2.67

Progressive currently has a consensus target price of $269.90, indicating a potential upside of 24.29%. Stewart Information Services has a consensus target price of $77.50, indicating a potential upside of 8.61%. Given Progressive’s higher possible upside, equities research analysts plainly believe Progressive is more favorable than Stewart Information Services.

Insider and Institutional Ownership

85.3% of Progressive shares are held by institutional investors. Comparatively, 96.9% of Stewart Information Services shares are held by institutional investors. 0.3% of Progressive shares are held by insiders. Comparatively, 1.5% of Stewart Information Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Progressive and Stewart Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Progressive	12.57%	33.88%	9.15%
Stewart Information Services	3.65%	8.57%	4.45%

Dividends

Progressive pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. Stewart Information Services pays an annual dividend of $2.10 per share and has a dividend yield of 2.9%. Progressive pays out 2.2% of its earnings in the form of a dividend. Stewart Information Services pays out 58.5% 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. Stewart Information Services has raised its dividend for 4 consecutive years. Stewart Information Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Progressive has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Summary

Progressive beats Stewart Information Services on 10 of the 17 factors compared between the two stocks.

About Progressive

The Progressive Corporation, an insurance holding company, provides personal and commercial auto, personal residential and commercial property, business related 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, and pick-up trucks used by small businesses, as well as non-fleet taxis, black-car services, and airport taxis; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and long-haul operators; dump trucks used by light contractors and heavy constructions; 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. 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; acts as an agent to homeowners, general liability, workers' compensation insurance, and other products; and reinsurance services. It 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.

About Stewart Information Services

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction related services in the United States and internationally. The company involves in searching, examining, closing, and insuring the condition of the title to real property. It also offers home and personal insurance services; services for tax-deferred exchanges; and digital customer engagement platform services. It also provides appraisal management, online notarization and closing, credit and real estate information, and search and valuation services. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, and home builders through direct operations, network of independent agencies, and other businesses. The company was founded in 1893 and is headquartered in Houston, Texas.