Progressive (NYSE:PGR) versus RenaissanceRe (NYSE:RNR) Financial Analysis

Progressive (NYSE:PGR) and RenaissanceRe (NYSE:RNR) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Earnings & Valuation

This table compares Progressive and RenaissanceRe”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Progressive	$75.37 billion	1.73	$8.48 billion	$18.23	12.22
RenaissanceRe	$11.70 billion	1.04	$1.87 billion	$35.99	7.36

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

Profitability

This table compares Progressive and RenaissanceRe’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Progressive	12.57%	33.88%	9.15%
RenaissanceRe	14.23%	16.83%	3.17%

Volatility & Risk

Progressive has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500. Comparatively, RenaissanceRe has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500.

Dividends

Progressive pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. RenaissanceRe pays an annual dividend of $1.60 per share and has a dividend yield of 0.6%. Progressive pays out 2.2% of its earnings in the form of a dividend. RenaissanceRe pays out 4.4% 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. RenaissanceRe has increased its dividend for 30 consecutive years. RenaissanceRe is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Progressive and RenaissanceRe, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Progressive	2	11	6	1	2.30
RenaissanceRe	1	11	5	0	2.24

Progressive presently has a consensus price target of $266.52, indicating a potential upside of 19.60%. RenaissanceRe has a consensus price target of $285.92, indicating a potential upside of 7.96%. Given Progressive’s stronger consensus rating and higher possible upside, analysts clearly believe Progressive is more favorable than RenaissanceRe.

Insider & Institutional Ownership

85.3% of Progressive shares are owned by institutional investors. Comparatively, 100.0% of RenaissanceRe shares are owned by institutional investors. 0.3% of Progressive shares are owned by insiders. Comparatively, 2.0% of RenaissanceRe shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Progressive beats RenaissanceRe on 12 of the 18 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 RenaissanceRe

RenaissanceRe Holdings Ltd., together with its subsidiaries, provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, typhoons, and tsunamis, as well as winter storms, freezes, floods, fires, windstorms, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, binding facilities, and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes products and services primarily through intermediaries. The company invests in and manages funds. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.