2 Finance Stocks to Buy as Q3 Earnings Approach: BK & PGR

As the third quarter earnings season approaches, investors are eagerly awaiting the financial results of major companies. Among the financial institutions set to report their quarterly results are The Bank of New York Mellon (BK) and The Progressive Corporation (PGR). These two finance stocks have shown impressive performances and are expected to continue their upward trajectory. This article explores the reasons why now might be a good time to invest in BNY Mellon and Progressive.


BNY Mellon's Consistency

BNY Mellon, a global wealth and asset management company, has operations in over 35 countries. Its expansion in the wealth and asset management sector is intriguing, with Q3 sales expected to be up 3% to $4.52 billion. On the bottom line, Q3 earnings are projected to increase by 10% to $1.40 per share.

BNY Mellon has a strong track record of consistent earnings growth, having reached or exceeded the Zacks EPS Consensus for 21 consecutive quarters dating back to July of 2019. The company has also posted an average EPS surprise of 9.92% in its last four quarterly reports. With expectations of 12% EPS growth in fiscal 2024 and FY25, BNY Mellon's stock has soared over +70% year to date and still trades at an attractive 12.9X forward earnings multiple. Additionally, BNY Mellon offers a generous 2.57% annual dividend yield, which should keep investors engaged.

Progressive's Insurance Premiums

Progressive, a major domestic auto insurer, is expected to benefit from a deflationary environment. The company's Zacks Insurance-Property and Casualty Industry is currently in the top 10% of over 250 Zacks industries. Insurance premiums should continue to boost Progressive's profitability, with net premiums earned during Q3 expected to spike 22% to $17.94 billion versus $14.89 billion in the comparative quarter.

Progressive's Q3 EPS is projected to soar 59% to $3.33 compared to $2.09 per share a year ago. The company is also expected to see steady top line expansion, with Q3 sales slated to spike 20% to $18.94 billion, and double-digit revenue growth forecasted for FY24 and FY25.

Progressive has widely surpassed earnings expectations in each of its last four quarterly reports, posting an average EPS surprise of 24.08%. Earnings estimate revisions for Q3, FY24, and FY25 have soared over the last 60 days, suggesting more upside in Progressive's stock. The company still trades at a reasonable 19.1X forward earnings multiple.


Bottom Line

As the third quarter earnings season approaches, investors should keep a close eye on BNY Mellon and Progressive. Both companies have shown impressive stock performances and are expected to continue their upward trajectory if they can reach or exceed earnings expectations. Now may be a good time to buy these finance stocks as they could provide significant returns in the coming months.