Progressive Corp.'s board of directors has announced a 4-for-1 stock split, a new stock buyback program and a quarterly dividend.

The buyback announced at Friday's annual meeting was seen as a positive move by Bear Stearns analyst David Small.

Mr. Small said he saw the share repurchase as an indication "both management and the board are working to address the company's significant excess capital position as it heads into a self-described lower growth period."

"The additional 60 million shares bring the total outstanding authorization to 71.2 million shares on a post-split basis, including shares remaining from the previous repurchase authorization."

Mr. Small wrote that the split should improve liquidity somewhat and was not surprising considering comments in the company's annual report.

The split will come as a stock dividend, with shareholders of record on May 8 getting three more shares added to each share of common stock they hold on May 18.

Earlier this month, the company announced first-quarter profits increased 6 percent while the combined ratio rose .2 points.

But analysts expressed concern that while profits remained strong, top line growth and pricing was beginning to suffer.

At the time, Bank of America securities analyst Brian Meredith said the company's 1.1 million share buyback "marked a return to its aggressive capital management program."

Special Reports /

Progressive Announces Stock Split, Dividend

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