) recently received the approval to increase its quarterly
dividend by 24% at the extraordinary general meeting held on Jan
ACE Limited will now pay a quarterly dividend of 63 cents ($2.52
on an annualized basis), up from 51 cents ($2.04 on an annualized
basis) paid earlier. The increased dividend will be paid on Jan
31, 2014 to the shareholders of record on Jan 13, 2014.
In the past, ACE Limited has maintained a consistent track record
of paying quarterly dividends and increasing its dividend payout
each year. The current dividend hike is thus not an exception.
Over the past 5 years, the company has increased its dividend at
a CAGR of 15.2%. Earlier, In May 2013, the board had announced a
4% increase in quarterly dividend from 49 cents ($1.96 on an
Based on Friday's closing price of $98.67, the company's dividend
yield is 2.55%, much above the sector average of 2.28%. The
company intends to pay out around 30% of its operating earnings
to its shareholders.
ACE Limited will pay the dividend from its capital contribution
reserves that are duly supported by sustained solid operational
performance at the company.
Besides continuous dividend increases, ACE Limited also
aggressively buys back shares to boost its bottom line.
Consistent with such efforts, last November, ACE Limited was
authorized to repurchase $2 billion worth of shares through Dec
31, 2014. ACE Limited eyes repurchase of $1.5 billion worth of
shares by 2014-end. The company repurchased $233 million or 2.7
million shares in the first nine months.
Several insurers have made dividend hikes with an intention to
enhance shareholders' value. Last month, the board of directors
Erie Indemnity Company
) approved a dividend hike on both Class A and Class B shares.
While a 7.2% dividend hike was approved for Class A shares, a
3.2% hike was approved for Class B shares.
In Nov 2013, the board of directors of property and casualty
Montpelier Re Holdings Ltd
) increased its dividend by 9% to 12.50 cents per share. Yet
another life insurer,
American Equity Investment Life Holding Co.
) approved a 20% increase in its annual cash dividend to 18
ACE LIMITED (ACE): Free Stock Analysis Report
AMER EQUITY INV (AEL): Free Stock Analysis
ERIE INDEMNITY (ERIE): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
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ACE Limited currently carries a Zacks Rank #2 (Buy).