In an effort to distribute more profit among shareholders, the
board of directors of
HCC Insurance Holdings, Inc.
) increased its dividend by 36.4%. The company will now pay a
quarterly dividend of 22.50 cents per share, up from 16.50 cents
paid on Jul 15, 2013.
The newly increased dividend will be paid on Oct 15, 2013 to the
shareholders of record as of Oct 1, 2013. Based on the closing
share price of $43.34 on Aug 21, the increased dividend implies a
dividend yield of 2.1%. The current dividend yield is better than
other property and casualty insurers
Everest Re Group Ltd
) yield of 1.4% and
State Auto Financial Corp.
) with a yield of 2.0%.
The dividend hike was primarily supported by HCC Insurance's
strong balance sheet and its ability to generate healthy cash
flow, which is supported by its continued solid operational
performances. Based on the 99.1 million shares outstanding as of
Jun 30, 2013, HCC Insurance requires $22.1 million for the
payment of the quarterly dividend. Cash balance at the end of the
second quarter stood at nearly $39.3 million while cash from
operations in the first half totaled $102 million.
With the recent approval, HCC Insurance has increased dividend
for the 17th consecutive year. Earlier, in Aug 2012, the board
had approved a 6.5% increase, raising the dividend to 16.5 cents
from 15.5 cents.
Besides increasing dividend, the company also engages in share
repurchase to enhance its shareholders value. In the first six
months of 2013, HCC Insurance spent $40.9 million to buy back 1
million shares. The company is left with $208.9 million under its
authorization. In August last year, the board also authorized a
buyback program worth $300 million.
HCC Insurance carries a Zacks Rank #3 (Hold).
HCI Group, Inc.
) with Zacks Rank #1(Strong Buy) is also worth taking a look.
HCC INS HLDGS (HCC): Free Stock Analysis
HCI GROUP INC (HCI): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
STATE AUTO FINL (STFC): Free Stock Analysis
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