Porto Seguro: beyond car insurance, profit up 14.9% a year

PSSA3Porto Seguro

InsuranceFormula: Peter Lynch · Price R$ 44.35 (Friday close)

Car and home insurance is where Porto Seguro leads Brazil; health plans, cards and credit now grow beside it. Peter Lynch asked for a growth-for-the-price score of 1.5. Porto scores 2.7.

The thesis

Porto Seguro made its name insuring cars, and cars are no longer most of the story. Car insurance was once 85% of group profit and 37% by early 2025, as health plans, cards and credit grew alongside. The whole group grew fast: revenue up 17.0% a year and profit up 14.9% a year for five years, with R$ 22.80 of profit in the last 12 months per R$ 100 of shareholders' money. Yet the stock costs about 7.7 years of profit, and on Lynch's growth-for-the-price score Porto gets 2.7 against a 1.5 bar. The market still prices a car insurer; the profit says the group is more than that.

What the company does

Porto, founded in 1945 and based in São Paulo, leads Brazil's auto and home insurance and also offers life, health and business insurance and pensions. It is organized in verticals: Porto Seguro (insurance and pensions), Porto Saúde (health), Porto Bank (cards, credit and digital accounts) and Porto Serviço (assistance). Businessman Jayme Garfinkel and Itaú Unibanco control it through the holding Psiupar, and its products have been offered at Itaú branches since 2009.

Lynch ratio2.7(Growth + yield) ÷ P/E. 1.5 passes; 2 or more is what Lynch looked for

Profit growth, 5-yr CAGR14.9%Profit grew about 14.9% a year over 5 years

Dividend yield, last 12 months5.8%Cash paid in the last 12 months, as a share of the price

P/E7.7The price equals about 7.7 years of current profit

Why the formula picked it

Revenue and profit both grew more than 10% a year without a jump above the 40% cap, with profit every year and ROE of 22.8%. Five companies passed. Cemig and Itaú ranked ahead, at 3.6 and 2.73 against Porto's 2.68, but both were picked in the last four weeks. Itaú, last week's Lynch pick, is also one of Porto's two controllers.

Bear case

The score leans on growth, not dividends: the trailing yield is 5.8% and the five-year average only 2.7%, so most of the score comes from profit growth. Insurance profit turns with claims, and ROE fell to 10.7% in one of the last five years, below the 12% the screen asks for today. At 1.76 times book value Porto is not cheap on assets. And control sits with Jayme Garfinkel and Itaú, so minority holders follow their choices.

What would break the story

Revenue or profit growth under 10% a year, ROE under 12%, or the Lynch ratio slipping under 1.5, which slower growth or a higher P/E would cause. Outside the formula: a bad claims cycle in car insurance that drags profit down.

Since the screen picked it

Start: November 6, 2026 · R$ 44.35

	PSSA3	Ibovespa	Difference
So far	First update on the next Saturday
3 months	On February 6, 2027
6 months	On May 6, 2027
9 months	On August 6, 2027
12 months	On November 6, 2027

Price change only: dividends are not included, in the stocks or in the benchmark. The Ibovespa is measured through BOVA11, the ETF that tracks it. Prices: B3 end of day. Updated every Saturday. Past results do not predict future ones.

All the numbers

PriceR$ 44.35

Lynch ratio2.7

Profit growth, 5-yr CAGR14.9%

Revenue growth, 5-yr CAGR17.0%

Dividend yield, last 12 months5.8%

P/E7.7

ROE, last 12 months22.8%

Also passed: CMIG4, ITUB4, TOTS3

Sources for the company facts

Financial numbers: B3 closing prices (Friday) and CVM filings, computed by our screen.

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