Assurant Approves Share Buyback - Analyst Blog


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In order to boost shareholders' value, Assurant Inc. ( AIZ ) has approved an increase of $600 million of share buyback. The news resulted in 0.73% increase in share price that closed at $61.80 on Nov 18.

This program is an extension to the previous authorization under which Assurant was left with $152 million for repurchases as of Oct 31, 2013. The company spent $351 million to buyback 7 million shares from beginning of the year through Oct 2013. Its repurchases in the last quarter totaled 1.9 million shares for a total of $104.9 million.

Previously in May 2012, Assurant had announced an increase of $430 million in its share buyback program.

Assurant's financial strength with a moderate debt and sufficient cash on hand allows it to continue with its buyback program.  As of Sep 30, 2013, cash and cash equivalents stood at $1.3 billion and cash from operations stood at $377.3 million.

Assurant is well known for its disciplined capital management and efforts aimed at boosting shareholder returns via share buyback as well as dividend increase. Since its initial public offering the company has bought back 50% outstanding shares every year. It has also maintained a trend of dividend increase every year since then.

The share buyback sends a positive signal about the long term prospects of Assurant which has a diverse product base and distribution platform, established presence in various niche markets, adequate risk-adjusted capitalization, and solid operating earnings. Lower share count due to share buyback is expected to boost the bottom line. Earnings per share are expected to grow 15.5% in 2013.

This Zacks Rank #2 (Buy) stock has also witnessed an increase in earnings estimates over the past 30 days. The Zacks Consensus Estimate for 2013 went up by 4.1% to $6.08 as 10 out of 11 estimates moved north. The same for 2014 was up by 1.8% as 7 out of 11 estimates were raised higher.

Last week another property and casualty insurer, Montpelier Re Holdings Ltd. ( MRH ) increased its share buyback authorization by $150 million.

Other players Chubb Corp. ( CB ) and Principal Financial Group Inc. ( PFG ), among other, both with Zacks Rank #2 (Buy) also follow a prudent share repurchase strategy.

ASSURANT INC (AIZ): Free Stock Analysis Report

CHUBB CORP (CB): Free Stock Analysis Report

MONTPELIER RE (MRH): Free Stock Analysis Report

PRINCIPAL FINL (PFG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: AIZ , CB , MRH , PFG

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