For the second time since 2007, the board of global multi-line
) announced a 27% hike in its regular dividend payout to 35 cents
per share from the prior 27.5 cents.
Following the announcement, early on Tuesday, MET's stock
price climbed 1.5% and closed at $51.90. The raised annual
dividend generates a dividend yield of 2.7%, up from prior
payout-yield of 2.1%.
The last dividend increase of 49% had been declared in Apr
2013, while the latest hike brings the total annual dividend to
$1.40 per share from $1.10. Accordingly, the hiked dividend will
be paid on Jun 13, 2014 to the shareholders of record as on May
Although MetLife has withheld share repurchases, we believe
appreciation of shareholder value through dividend payouts also
instill confidence in the stock. Additionally, optimistic
long-term growth, particular within the company's U.S. and
emerging markets, assures buoyancy amid economic volatility and
low interest rate environment.
MetLife holds one of the sturdiest capital positions in the
industry, which is cushioned by a diversified portfolio mix and a
leading brand, as reflected by over 40% earnings growth in
2011-2013, healthy return on equity (ROE) of 12% at 2013-end,
ratings and efficient business restructuring. Moreover, the
company maintains steady cash flows and a diminishing
risk-profile with a financial leverage that improved to below 28%
in 2012 and 2013.
However, the ongoing regulatory challenges and the risk of
being acknowledged as a systemically important financial
institution could put MetLife under the Federal Reserve's
supervision and further amplify capital compliances.
Nonetheless, MetLife's confidence lies in its strong
fundamentals that has supported a modest dividend increment,
similar to industry peers. Earlier this month,
) hiked its dividend by 43%. Among others, arch-rival -
American International Group Inc.
) along with
RenaissanceRe Holdings Ltd.
AmTrust Financial Services Inc.
United Insurance Holdings Corp.
) raised their dividends by 25%, 3.6%, 43% and 33.3%,
respectively, in Feb 2014.
While MetLife and United Insurance carry a Zacks Rank #4
(Sell), RenaissanceRe sports a Zacks Rank #1 (Strong Buy). All
other aforementioned stocks carry a Zacks Rank #3 (Hold).
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