Critical Comparison: Stewart Information Services (NYSE:STC) and Progressive (NYSE:PGR)

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

Profitability

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

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

Volatility & Risk

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

Analyst Recommendations

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

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

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

Institutional and Insider Ownership

96.9% of Stewart Information Services shares are owned by institutional investors. Comparatively, 85.3% of Progressive shares are owned by institutional investors. 1.5% of Stewart Information Services shares are owned by insiders. Comparatively, 0.3% of Progressive shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Stewart Information Services pays an annual dividend of $2.10 per share and has a dividend yield of 2.9%. Progressive pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. Stewart Information Services pays out 58.5% of its earnings in the form of a dividend. Progressive pays out 2.2% 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.

Valuation and Earnings

This table compares Stewart Information Services and Progressive”s revenue, earnings per share (EPS) and valuation.

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

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.

Summary

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

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.

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.