As part of its efforts to enhance shareholders' value, the board
of directors of
) authorized an 8% increase in its quarterly common stock dividend
last Friday. The company will now pay a quarterly dividend of 27
cents per share, up from 25 cents paid in the last quarter. The
increased dividend will be paid on Jun 10, 2014 to shareholders of
record on May 27, 2014.
The dividend hike is primarily supported by Assurant's strong
balance sheet, a moderate debt ratio of approximately 27% as of Mar
31, 2014 and its ability to generate healthy cash flow.
Assurant has a track record of increasing quarterly
dividends. The current authorization marks the eleventh dividend
hike since 2004. Assurant's five-year dividend growth rate stands
at 12.20%, much higher than the industry's dividend growth rate of
News of Assurant's latest dividend hike made the stock price
rise 1.11% and close at $67.64 on Friday. The board had last
authorized a 19% increase in dividend.
Assurant commenced paying dividends in 2004 (the year it went
public) and paid a total of 21 cents per share in its first year.
In 2013, the company paid 96 cents per share in dividends, which
represented compounded annual average growth of 18.4%.
Going forward, we believe that Assurant will be able to continue
increasing dividend payments aided by its low payout ratio. The
company has been very careful about its payout ratio and has
gradually increased the same over the years. In 2004, Assurant's
dividend payout ratio was 8.3% and over the years, it has increased
to reach 15.1% in 2013.
Assurant follows a disciplined capital management strategy and
has always managed to keep up shareholders' confidence by actively
deploying capital though dividend payments and share
Last month, Assurant reported first-quarter 2014 operating
income of $1.68 per share, comfortably beating the Zacks Consensus
Estimate of $1.56 per share. Earnings were also up 24% on a
year-over-year basis. Strong performance at Assurant Solutions and
Assurant Employee Benefits, along with a lower share count owing to
share repurchases, boosted the quarter's results.
Following strong results, Assurant witnessed an increase in
earnings estimates. For 2014, earnings estimates went up 2.3% to
$6.29 per share as 5 of the 7 analysts covering the stock raised
Other stocks that have recently increased dividend are
Cincinnati Financial Corp.
The Travelers Companies, Inc.
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