October 15, 2012 at 08:49 AM EDT
Progressive Sets Special Dividend; Citigroup Downgrades Company to “Sell” (PGR)

On Friday, October 12,The Progressive Corporation (PGR) declared a special dividend of $1 per share. In response, analysts at Citigroup downgraded PGR to a “Sell” rating.

The insurance company reported that this dividend will be paid on November 29 to shareholders of record as of November 21. The ex-dividend date is November 19.

This special dividend will return $600 million to its share holders. Progressive said it will not affect the annual variable dividend program already in place.

Citigroup analysts reduced the rating for the company from “Neutral” to “Sell” due to the announcement of the special dividend. They lowered the price target from $22 per share to $19 per share. The new price target is -$3.20 (-14.4%) of Friday’s closing share price of $22.20.

Progressive’s share price was flat in premarket trading on Monday.

The Bottom Line
Shares of Progressive Corporation (PGR) have a 1.80% dividend yield, based on Friday’s closing stock price of $22.20. The stock has technical support in the $18-$19 price area. If the shares can firm up, we see overhead resistance around the $23-$24 price levels.

The Progressive Corporation (PGR) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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