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W.R. Berkley (WRB) Boosts Shareholders' Value Via Several Moves

W.R. Berkley Corporation’s WRB board of directors approved a special cash dividend of 50 cents per share. Concurrently, the board also approved a 9.1% hike in annual cash dividend to 48 cents. Shareholders, as of the close of business on Jun 24, 2024, will receive the quarterly dividend on Jun 28, 2024.

The recent dividend hike is the 19th straight increase by the insurer. It also pays special dividends. Notably, WRB has continually paid dividends for nearly five decades.

W.R. Berkley, banking on operational strength, has a solid balance sheet with sufficient liquidity and strong cash flows. A strong capital position enables the nation’s largest commercial lines property casualty insurance provider to distribute wealth to shareholders via share repurchases, special dividends and dividend hikes.

Apart from dividends, the company resorts to regular share buybacks as another way to enhance shareholder value.

Improved pricing, expansion of international business, reserve discipline, a solid balance sheet and a prudent capital management policy should help WRB maintain its streak of dividend hikes and special dividends. The company targets a return on equity of 15% over the long term.

Additionally, the board of directors has also approved a 3-for-2 stock split in the form of a stock dividend to shareholders of record as of Jun 24, 2024. The split will take effect on Jul 10.

Shares of WRB have gained 10.5% year to date, compared with the industry’s 14.2% increase. Its solid insurance business, strong international business and a sturdy financial position should help drive shares.

Zacks Investment Research
Zacks Investment Research

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WRB currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Shareholder-Friendly Moves in the Insurance Space

The board of directors of Radian Group RDN authorized a share buyback program to return more value to investors. With the latest authorization, the board increased the authorization by $600 million to $900 million. The program remains active through Jun 30, 2026.

Improving mortgage insurance portfolio, declining claims, a well-performing homogenous segment and a solid capital position should help the insurer deliver impressive results. This, in turn, should poise the company well with sufficient liquidity and aid in boosting shareholders' value.

Recently, the board of directors of AXIS Capital Holdings Limited AXS authorized a share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $300 million to repurchase its common stock.

Intensified focus on specialty lines, continuous investment in growth areas, including wholesale insurance and lower middle markets, exit from the volatile catastrophe and property reinsurance space and reduction of risk exposure while concentrating on accident and health, casualty, credit and surety, and specialty reinsurance lines should help the insurer deliver impressive results. This, in turn, should poise the company well with sufficient liquidity and aid in boosting shareholders' value.

The board of RenaissanceRe RNR approved a renewal of the authorized share repurchase program, bringing the total current authorization to $500 million. RenaissanceRe boosts shareholder value by banking on its ability to generate free cash flow. In February 2024, the company’s board of directors approved a 2.6% hike in the quarterly dividend. The increased dividend marked the 29th straight year of a dividend hike. Its dividend yield of 0.7% remains higher than the industry average of 0.3%.

Improving premiums in specialty lines given market dislocation and rate increases, higher demand for reinsurance in Florida, and the acquisition of Validus Re, AlphaCat and the Talbot Treaty reinsurance business from AIG enhance the scale of its global property and casualty reinsurance business. These also boost profitability and thus aid in enhancing shareholders' value.


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