Yahoo Finance Chubb Limited's (CB) Board Okays 3.6% Dividend Increase
Chubb Limited’s CB board of directors approved a 3.6% hike in its dividend. The insurer will now pay an annual dividend of $3.44 or 86 cents per share quarterly. The latest hike marks the 30th straight year of dividend increase.
Shareholders of record as of Jun 16 will receive the increased quarterly dividend on Jul 7. Based on the closing price of $198.93 as of May 17, the company’s dividend yield is 1.7%, much above the industry average of 0.3%. This makes the stock an attractive pick for yield-seeking investors.
This Zacks Rank #3 (Hold) insurer is one of the largest product portfolios in the global insurance industry. CB is focusing on cyber insurance that has immense room for growth, putting in efforts to capitalize on the potential of middle-market businesses, both domestic and international, with a traditional core package as well as a specialty product. Better pricing, business growth and high renewal rates along with other positives, should help it continue its effective capital deployment.
Chubb has a strong capital position with sufficient cash-generation capabilities. Its underwriting and investment performance provides strong support to operating cash flow. Riding on a strong capital position, Chubb also buys back shares apart from paying dividends.
The insurer bought back $471 million worth of shares in the first four months of 2023. As of May 1, 2023, $1.2 billion remained in its share repurchase authorization. Also, CB’s return on equity — a profitability measure of how prudently the company is utilizing its shareholders’ funds — stands at 13.1%, higher than the industry’s average of 6.9%.
Shares of Chubb have lost 9.8% year to date against the industry’s rise of 3%. Chubb’s superior underwriting discipline and sound capital structure should help shares bounce back.
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Given the solid capital level of the insurance industry and an improving operating backdrop favoring strong operational performance, insurers like RLI Corp. RLI and CNO Financial Group, Inc. CNO have raised dividends to enhance shareholder value.
RLI approved a 3.8% hike in its quarterly dividend to enhance shareholder value. RLI has a dividend yield of 0.8%, better than the industry average. RLI drives long-term sustainable growth for shareholders with the help of its product portfolio, careful selection of niche markets, distribution partners and customers and the strength of its balance sheet, which in turn enable it to hike dividends regularly.
CNO Financial Group’s board of directors approved a 7.1% hike in the quarterly dividend, taking its dividend yield to 2.5%. CNO has been quite active on the capital deployment front for the past few years. Its sustained solid operational performance that supports its financial position equips CNO to pursue uninterrupted share buybacks and dividend payments.
A Stock to Consider
A better-ranked stock from the same space is Kinsale Capital Group KNSL, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale delivered a four-quarter average earnings surprise of 14.77%. Year to date, the insurer has gained 23.3%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings indicates a respective year-over-year increase of 32.9% and 19.7%.
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RLI Corp. (RLI) : Free Stock Analysis Report
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