AXIS Capital Holdings Limited
) intends to boost dividend to enhance shareholders' value. The
board of directors recently approved a 8% hike in quarterly
dividend. The company will now pay a dividend of 27 cents per
share, up from 25 cents paid in Oct 2013.
The increased dividend will be paid on Jan 15, 2014 to the
shareholders of record on Dec 31, 2013.
AXIS Capital, over the past, has paid regular quarterly dividends
and has increased dividend each year. The current dividend marks
the tenth straight year of increase. Based on yesterday's closing
price of $48.46, AXIS Capital's dividend yield is 2.22%. Its
earlier dividend hike had been effectuated in Dec 2012, wherein
the board had approved a 4.2% increase.
Besides the dividend hike, the board also approved a buyback
program, authorizing AXIS Capital to repurchase shares worth $750
million through Dec 31, 2014. The current program replaces the
earlier one that has $308.9 million remaining through Dec 31,
2013. The company had spent $441 million to buy back 10.1 million
shares thus far in 2013, bringing the tally to 78 million shares
repurchased for $2.6 billion over the last 10 years.
The dividend hike and new authorization by AXIS Capital is duly
supported by the company's sturdy financial position. Cash and
cash equivalent increased nearly 38% from 2012-end to $1.05
billion at third-quarter end. Retained earnings also stand solid
at $4.9 billion, up 10%. A solid operational performance
continues to cushion the company's sturdy financial position.
AXIS Capital has been on an uptrend since it reported solid
third-quarter earnings on Oct 30. Shares have gained almost 3%
since then. With the company's efforts to boost shareholder
value, we expect investor confidence to grow further.
Additionally, with excess capital of $6.7 billion as on Sep 30,
2013, we expect such initiatives by the company going forward,
besides investments in growth projects.
We also expect analysts to revise estimates upward and in turn
affect the Zacks Rank positively, following the proposal to
increase dividend and the new share buyback approval. AXIS
Capital presently carries a Zacks Rank #2 (Buy).
Several insurers are treading the same path as AXIS Capital by
announcing dividend hikes or share repurchases. These strategies
help retain investor confidence as well as attract new investors.
Last month, property and casualty insurer
Montpelier Re Holdings Ltd
) approved a 9% increase in quarterly dividend to 12.50 cents per
share and also raised its share buyback authorization by $150
The board of directors of
The Hanover Insurance Group Inc
) approved a 12.1% increase in its quarterly dividend to 37
cents. The board of
) also approved a buyback program, authorizing the company to
repurchase $2 billion worth of shares through Dec 31, 2014. ACE
also announced its intention to propose a 24% hike in dividend in
the extraordinary general meeting scheduled on Jan 10, 2014.
ACE LIMITED (ACE): Free Stock Analysis Report
AXIS CAP HLDGS (AXS): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
HANOVER INSURAN (THG): Free Stock Analysis
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