In a concerted effort to enhance shareholders' value,
) intends to boost its dividend. The board of directors will
propose a 4% increase in the quarterly dividend at the
extraordinary general meeting scheduled on May 16, 2013.
ACE Limited, if approved, will pay a quarterly dividend of 51
cents ($2.04 on an annualized basis), up from 49 cents ($1.96 on
an annualized basis). Previously, in May 2012, the board
announced a 4.25% increase in the quarterly dividend from 47
cents ($1.88 on an annualized basis).
ACE has maintained a consistent track record of paying quarterly
dividends and the current dividend is not an exception. The
company also has a record of increasing dividend each year. Its
dividend yield is 2.30%, much above the industry yield of 1.63%
and that of its peer
) yield of 1.86%.
ACE appears to have a strong capital and liquidity position,
helping it increase the quarterly dividend. The cash balance of
ACE Limited at 2012-end totaled $615 million, while cash from
operation approximated $4 billion.
A few property and casualty insurers like
XL Group plc
), among others, have also hiked their dividends recently. While
the board of directors of Chubb approved a 7.3% dividend increase
on Feb 28, the board of directors of XL Group approved a 27%
dividend hike on Feb 22.
ACE Limited reported robust fourth-quarter results with operating
income coming in at $1.43 per share, ahead of the Zacks Consensus
Estimate by 14 cents. Earnings, however, declined 25% year over
year, as the reported quarter was hugely affected by cat losses
incurred due to Superstorm Sandy.
Nevertheless, prudent underwriting practices, international
presence, diversified product offering and a sturdy balance sheet
managed to limit the adverse effect. It continues to expand its
international footprint with acquisitions in Indonesia and
Mexico. The company also remains focused on enhancing its
earnings, ROE and book value per share.
ACE Limited currently carries a Zacks Rank #3 (Hold).
ACE LIMITED (ACE): Free Stock Analysis Report
CHUBB CORP (CB): Free Stock Analysis Report
RLI CORP (RLI): Free Stock Analysis Report
XL GROUP PLC (XL): Free Stock Analysis Report
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