In an effort to distribute more profit among shareholders, the
board of directors of
) authorized an increase of 19% in its dividend. The company will
now pay a quarterly dividend of 25 cents per share, up from 21
cents per share paid earlier.
ASSURED GUARNTY (AGO): Free Stock Analysis
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The newly increased dividend will be paid on Jun 11, 2013 to the
shareholders of record as of May 28, 2013. Based on the closing
share price of $47.37 on May 10, the increased dividend implies a
dividend yield of 2.1%. It is better than the industry yield
1.53% and few other multi-line insurers -
) with a yield of 0.1%,
CNO Financial Group Inc
) with a yield of 1.0% and
Assured Guaranty Ltd.
) with a yield of 1.7%.
Assurant has been consistently increasing its dividend over the
years. The current hike marks the 10th straight year of increase
in the quarterly dividend. The dividend hike was primarily
supported by Assurant's strong balance sheet and its ability to
generate healthy cash flow. The previous hike was authorized in
May 2012, when the board approved a 16.7% increase in dividend.
Over the last 5 years, Assurant's quarterly dividend payout has
more than doubled.
Based on the 80.9 million shares outstanding as of Mar 31, 2013,
the company requires $20.2 million for the payment of the
quarterly dividend. Cash balance at the end of the first quarter
stood at $1.6 billion (up 76% from 2012-end level), sufficient to
meet the additional requirement.
Besides dividend increase, the property and casualty insurer buys
back share. Assurant spent $26.6 million to repurchase 0.6
million shares in the first quarter of 2013. In total, it had
returned $43.4 million to its shareholders via dividends and
share repurchases. Subsequent to the first quarter, Assurant also
bought another 1.5 million shares for $69 million.
Assurant carries a Zacks Rank #3 (Hold).