The share price of
Brown & Brown Inc.
) has been on an uptrend following the news of dividend increase.
Share prices increased 2% to close at $33.24 on Oct 18, 2013. The
board of directors of the company approved 11.1% increase in its
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The insurance broker will now pay a quarterly cash dividend of 10
cents, up from 9 cents paid on Aug 14, 2013. The newly increased
dividend will be paid on Nov 13, 2013 to the shareholders of
record as of Oct 30, 2013.
Based on the closing share price of $33.24 on Oct 18, the
increased dividend implies a yield of 1.2%. The current dividend
yield of Brown & Brown Inc. is better than another insurance
) yield of 0.9%.
The dividend hike was primarily supported by Brown & Brown
Inc.'s strong balance sheet and its ability to generate healthy
cash flow, which in turn, is owing to its continued solid
operational performance across all four business divisions. Cash
and cash equivalents at the end of the third quarter of 2013
stood at nearly $171 million. Based on about 143 million shares
outstanding, the company will have to dish out nearly $14.3
million as quarterly dividend.
With the recent approval, the company marks the 20th consecutive
year of dividend increase. In Oct 2012, the board had approved a
5.9% increase, raising the dividend to 9 cents from 8.5 cents.
Brown & Brown Inc. presently carries a Zacks Rank #3 (Hold).
With the recent news announcement, we expect analysts to raise
their estimates exerting upward pressure on the Zacks Rank. Among
others in the insurance space, insurance broker
Validus Holdings Ltd.
) with a Zacks Rank #2 (Buy), and property & casualty insurer
) with a Zacks Rank #1 (Strong Buy), appear impressive.