In order to boost shareholder value,
) increased its quarterly dividend by 20%. This translates into a
quarterly cash dividend of 30 cents per share, up from 25 cents
per share paid on Nov 10, 2013. The increased dividend will be
paid on Jan 9, 2014, to shareholders of record as of Dec 27,
Based on the closing share price of $48.22 on Dec 4, 2013, the
increased dividend implies a dividend yield of 2.49%.
ProAssurance's current dividend yield is better than the industry
yield of 1.85% and that of some other property and casualty
) with a yield of 1.39%,
Allied World Assurance Company Holdings, AG
) with a yield of 1.80% and
Montpelier Re Holdings
) with a yield of 1.74%.
ProAssurance's board of directors also approved a $100 million
share repurchase program. This authorization is an extension to
the previous share buyback program under which $127 million was
remaining. With this increase, the company's total authorization
currently stands at $227 million.
The dividend hike and the new share repurchase program reflect
the financial strength of the company. ProAssurance will require
$18.6 million every quarter for the dividend payment, based on
the outstanding share count of 62.04 million as of Sep 30, 2013.
The company has ample liquidity for the payment, with total cash
and cash equivalents of $279.05 million as of Sep 30, 2013.
ProAssurance has always been active in taking up strategic
initiatives to gain investor confidence, be it through share
repurchases, dividend hikes or debt repayment. Last year in
December, ProAssurance declared a stock-split (2:
), so as to make the shares affordable for investors. In terms of
share repurchases, ProAssurance has deployed $329 million over
the past six years to buy back 6.3 million shares.
During the third quarter of 2013, ProAssurance repaid the
entire outstanding amount in its credit facility and ended the
quarter with no long-term debt. Although the company issued a
$250 million debt on Nov 19, 2013, the proceeds from the issuance
are mainly aimed towards efficient capital management.
ALLIED WORLD AS (AWH): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
PROASSURANCE CP (PRA): Free Stock Analysis
RLI CORP (RLI): Free Stock Analysis Report
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ProAssurance delivered operating earnings per share of 88 cents
per share in the third quarter of 2013, improving 2.3% over the
year-ago earnings. Share buybacks should boost the bottom line
ProAssurance currently carries a Zacks Rank #3 (Hold).
Montpelier, RLI Corp and Allied World are some better-ranked
stocks in the property casualty insurance space. While Montpelier
and RLI Corp. carry a Zacks Rank #1 (Strong Buy), Allied World
carries a Zacks Rank #2 (Buy).