In order to enhance shareholder value,
Allied World Assurance Company Holdings, AG
) has proposed a 33% increase in its quarterly dividend. The
company recently filed a Preliminary Proxy Statement containing
the proposal to increase the quarterly dividend to 50 cents per
share from 37.5 cents paid earlier.
However, the proposal is yet to be approved by Allied World's
shareholders. The issue will be considered in the company's 2013
Annual Shareholder Meeting on May 2, 2013.
The increased dividend of Allied World, if approved, will
translate into an annual dividend yield of 2.27%, based on the
closing share price of $88.12 as of Mar 8. The current dividend
yield is much lower at 1.70%.
Allied World will pay the dividend from its general legal
reserve from capital contributions. The payment will be made in
If the proposal is approved, Allied World will require $69.6
million for dividend payment in 2013, based on the 34.8 million
shares outstanding as of Dec 31, 2012. The company has a strong
capital position with ample liquidity for the dividend payment.
Allied World had cash and cash equivalents of $681.9 million as
of Dec 31, 2012.
Last month, another property and casualty insurer
XL Group plc
) announced a 27% hike in its quarterly dividend to 14 cents per
share. The increased dividend will be paid on Apr 1, 2013 to the
shareholders of record as of Mar 15, 2013. This amounts to an
annualized dividend yield of nearly 2% based on the closing share
price of $28.99 on Feb 22, 2013, when the hike was announced.
Allied World currently carries a Zacks Rank #2 (Buy). Other
property and casualty insurers worth considering are
Cincinnati Financial Corp.
Navigators Group Inc.
). Both these companies carry a Zacks Rank #1 (Strong Buy).
ALLIED WORLD AS (AWH): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
NAVIGATORS GRP (NAVG): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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