The board of directors of
American Equity Investment Life Holding Company
) approved a 20% increase in its annual cash dividend. The life
insurer will now pay an annual dividend of 18 cents per share, up
from 15 cents per share paid on Dec 17, 2012. The newly declared
dividend will be paid on Dec 16, 2013 to shareholders of record
as on Dec 2, 2013.
Based on yesterday's closing share price of $23.49, the increased
dividend of American Equity implies a yield of 0.77%. However, it
still lags the dividend yields of other life insurers, like 1.27%
Lincoln National Corporation
) and 2.61% of
Manulife Financial Corporation
). Nonetheless, the 5-year dividend growth rate of American
Equity presently stands at 20.1%, which is significantly better
than the sector growth rate of 6.4%.
The dividend hike of American Equity was primarily supported by
its consolidated capital position and solid bottom-line growth,
which resulted from top-line improvement combined with reduced
expenses. The company delivered positive earnings surprises in 3
of the last 4 quarters with an average beat of nearly 25%. Based
on about 70.5 million shares outstanding, the company will have
to dish out roughly $12.7 million as annual dividend.
The recent approval marks the 10th straight year of annual
dividend increase as well as the 15th consecutive year of
dividend declaration. Prior to this, on Nov 2012, the board had
approved a 25% increase, raising the dividend to 15 cents per
share from 12 cents.
Among other life insurers, the board of directors of
StanCorp Financial Group Inc.
) recently approved 18% increase in its annual cash dividend. The
company declared an annual cash dividend of $1.10 per share to
There was no earnings momentum over the last 7 days. With the
news of dividend increase, we expect analysts to raise their
estimates exerting upward pressure on the Zacks Rank. American
Equity presently carries a Zacks Rank #2 (Buy).
AMER EQUITY INV (AEL): Free Stock Analysis
LINCOLN NATL-IN (LNC): Free Stock Analysis
MANULIFE FINL (MFC): Free Stock Analysis
STANCORP FNL CP (SFG): Free Stock Analysis
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