Covered — but the income lives in the variable dividend. A 0.18% regular yield on a roughly 2% payout is trivially covered: $0.10 a quarter, unchanged for years. Progressive's real cash return is its variable annual dividend — $13.50 declared Dec. 5, 2025 and paid Jan. 8, 2026 — plus buybacks, and that annual amount is decided fresh each December, so it cannot be counted as steady quarterly income.
Key risk: The variable dividend can shrink or vanish in a bad underwriting year — it is set each December from capital and earnings, so the headline quarterly rate alone tells almost nothing about what a holder actually receives.
Changes if: Progressive skips or sharply cuts the annual variable dividend, or the combined ratio deteriorates enough that capital return pauses. The quarterly $0.10 alone would then be the whole story.
- ✓Payout-coverage check: About 2% of trailing earnings on the regular $0.40 annual rate — covered many times over. The variable annual dividend is extra, decided each December.
- !Yield check: 0.18% indicated on the regular rate only — $0.10/qtr × 4 at the $228.14 close on Oct. 23, 2026. The $13.50 variable annual dividend paid Jan. 8, 2026 is real cash but is not steady quarterly income, so it is excluded from the headline yield.
- !Dividend growth check: The regular quarterly rate has sat at $0.10 for years; growth in cash returned comes through the variable annual dividend and buybacks, not through raises to the quarterly rate.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.