As an extension of the previous capital management plan, the
Hartford Financial Services Group, Inc.
) has decided to increase its quarterly dividend and share
repurchase activity. The company will pay a 50% higher dividend,
i.e. 15 cents per share, on Oct 1, 2013.
The increased dividend implies a yield of 2% per annum for
Hartford Financial, based on the closing share price of $29.99 as
on Jun 26, 2013. The company is yet to pay a quarterly dividend
of 10 cents per share on Jul 1, 2013 to shareholders of record as
of Jun 3. This translates into a yield of 1.33%.
Further, the board of Hartford Financial increased the share
repurchase authorization by $750 million. As a result, total
buyback authorization, including the $500 million authorized in
Feb 2013, totals $1.25 billion. The authorization will expire on
Dec 31, 2014.
Hartford Financial has already spent $166 million on buybacks
under the current authorization. The planned increase in dividend
and buyback expenditure is a result of the strong financial
position, lower risk and increasing financial flexibility of the
Hartford Financial's capital raise, repayment of government
funds and measures to de-risk its balance sheet have increased
its financial strength. The capital management plan announced in
Feb 2013 helped boost financial flexibility by reducing debt and
returning more value to shareholders through share repurchase.
The self-sufficiency of the Talcott Resolution segment with
regards to capital also played an important role.
Hartford Financial carries a Zacks Rank #3 (Hold). Other
multi-line insurance companies worth considering are
Eastern Insurance Holdings, Inc.
Enstar Group Limited
). All these companies carry a Zacks Rank #1 (Strong Buy).
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HARTFORD FIN SV (HIG): Free Stock Analysis
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