In order to boost shareholder value,
EMC Insurance Group Inc.
) increased its quarterly dividend by 9.5%. This translates into
a quarterly cash dividend of 23 cents per share, up from 21 cents
per share paid on Sep 17, 2013. The increased dividend will be
paid on Dec 3, 2013, to shareholders of record as of Nov 25,
Based on the closing share price of $29.89 on Nov 15, 2013, the
increased dividend implies a dividend yield of 3.08%. The current
dividend yield is better than the industry yield of 1.85%
and that of some other property and casualty insurers,
) with a yield of 1.38%,
) with a yield of 2.07% and
Montpelier Re Holdings Ltd.
) with a yield of 1.64%.
This dividend represents the hundred and twenty eighth
consecutive quarter of dividends declared by EMC Insurance.
Earlier in Nov 2012, the board of EMC Insurance approved a 5%
increase in quarterly dividend to 21 cents from 20 cents.
This dividend hike represents the financial strength and
long-term outlook of the company. EMC Insurance will require
$3.02 million every quarter for the dividend payment, based on
the outstanding share count of 13.1 million as of Sep 30, 2013.
The company has ample liquidity for the payment, with total cash
of $600.9 million as of Sep 30, 2013.
Moreover, the board of directors of EMC Insurance gave the nod
for a reduction in the cost of the excess of loss reinsurance
protection (from 9% of total assumed reinsurance premiums to 8%)
provided for 2014 to the reinsurance wing of the company - EMC
EMC Insurance currently carries a Zacks Rank #3 (Hold). However,
RLI Corp. and Montpelier both carry a favorable Zacks Rank #1
(Strong Buy) while ACE Limited carries a Zacks Rank #2 (Buy) and
ACE LIMITED (ACE): Free Stock Analysis Report
EMC INSURANCE (EMCI): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
RLI CORP (RLI): Free Stock Analysis Report
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