In a concerted effort to enhance shareholders value,
ACE Limited
(
ACE
) intends to substantially boost its dividend. The board of
directors will propose a 33% increase in the quarterly dividend at
the extraordinary general meeting scheduled on January 9, 2012.
ACE Limited, if approved, will now pay a quarterly dividend of
47 cents ($1.88 on an annualized basis), up from 35 cents ($1.40 on
an annualized basis). Previously, in February 2011, the board,
announced a 6.5% increase in the quarterly dividend to 35 cents
($1.40 on an annualized basis), up from 33 cents ($1.32 on an
annualized basis).
ACE has had a consistent track record of paying quarterly
dividends and the current dividend is not an exception to the case.
The company also has a record of increasing its dividend each year.
Its dividend yield is 2.04%.
ACE appears to have a strong capital and liquidity position,
helping it increase the quarterly dividend. The cash balance of ACE
Limited at third quarter end totaled $766 million, up 57% from year
ago level. Year -to-date, cash from operation also increased 8% to
total approximately $3 billion.
ACE Limited reported a strong third-quarter with operating
income coming in at $2.22 per share, which came in ahead of the
Zacks Consensus Estimate by a substantial 43 cents. Earnings
improved 10% from $2.01 per share earned in the year-ago
quarter.
Better-than-expected results stemmed from higher premiums and
investment income. The quarter experienced solid current accident
year underwriting results benefiting from both underwriting
discipline and risk management. Acquisitions also contributed to
the better results.
The results of ACE Limited were not affected despite natural
disasters that led to catastrophe losses. The company is well
poised driven by the strength of its international presence,
diversified product offering, risk management, conservative
underwriting practice and strong reserves. ACE Limited remains
focused on enhancing its earnings, return on equity and book value
per share.
ACE Limited raised its operating earnings expectation for 2011
to $6.55 - $6.75 per share from $6.00 - $6.20 guided earlier.
The Zacks Consensus Estimate for fourth-quarter 2011 is $1.95
per share. For full years 2011 and 2012, the Zacks Consensus
Estimates are, respectively, $6.93 per share and $7.45 per
share.
We maintain our long-term Neutral recommendation on ACE Limited.
The quantitative Zacks #2 Rank (short term Buy rating) for the
company indicates upward pressure on the stock over the near
term.
Headquartered in Zurich, Switzerland, ACE Limited, through its
subsidiaries, provides a range of insurance and reinsurance
products to commercial and individual customers worldwide. The
company competes with
American International Group Inc.
(
AIG
) and
The Travelers Companies Inc.
(
TRV
).
(The original article has been amended to correct a problem.
Originally released on Friday, November 18, 2011, it should no
longer be relied upon.)
ACE LIMITED (
ACE
): Free Stock Analysis Report
AMER INTL GRP (
AIG
): Free Stock Analysis Report
TRAVELERS COS (
TRV
): Free Stock Analysis Report
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