Basking after a strong third-quarter 2013, the board of
Lincoln National Corporation
) announced a 33% hike in its regular quarterly dividend of 12
cents a share. This marks the company's fourth dividend hike
since 2007, inflating shareholder value.
Accordingly, the raised dividend per share of 16 cents will be
paid on Feb 1, 2014, to shareholders of record as on Jan 10,
2014. A 33% hike also expanded the annual dividend to 64 cents a
share from the prior 48 cents. Based on Thursday's closing price
of $49.99, the raised dividend generates a dividend yield of
The prior dividend of 12 cents per share was last paid on Nov
1, 2013, to the shareholders of record as on Oct 10, 2013.
Previously, in Nov 2012, Lincoln had increased its annual
dividend by 50%, which was backed by a 60% hike in dividends in
Given the ongoing economic volatility that has been
pressurizing the bottom line of most insurers, the current hike
appears commendable and optimistic. A prudent capital management
has also helped Lincoln return higher-than-expected excess
capital to its shareholders, thereby infusing value-added
confidence among investors.
Over the last couple of years, Lincoln National has outpaced
its share buyback target by repurchasing shares worth $575
million in 2011, $492 million in 2012 and an additional $350
million worth of shares in the first nine months of 2013.
Lincoln National remains strong on account of expanded
distribution relationships, and a diversified product portfolio.
Improved financial leverage also enhances capitalization,
mitigates balance sheet risks, aids incremental capital
deployment, and provides liquidity cushion for long-term
Although economic volatility, competition, and low interest
rate environment restrict desired upside in the near-term,
Lincoln National is poised to grow in the long run and retain
investor confidence, as reflected by sound ratings.
Lincoln National presently sports a Zacks Rank #2 (Buy). Some
other outperforming insurers such as
China Life Insurance Co. Ltd.
American Equity Investment Life Holding Co.
) also carry the same Zacks Rank and are worth consideration.
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