Continuing its long-standing trend of increasing dividend
RenaissanceRe Holdings Ltd.
) announced a 3.7% hike in its quarterly dividend to 28 cents per
share from 27 cents paid earlier. The hike was approved by the
company's board of directors on Feb 20, 2013.
This marks the 18
consecutive annual dividend increase by RenaissanceRe. The
company has maintained this tradition ever since it went public
in 1993. The increased dividend will be paid on Mar 18, 2013 to
shareholders of record as of Mar 15. The increased dividend
implies an annual yield of 1.33%.
Concurrently, the board also approved an increase in
RenaissanceRe's share repurchase authorization. As a result, the
amount outstanding in the company's share buyback program surged
to $500 million, including the balance outstanding
RenaissanceRe has not set any expiry date for the repurchase
authorization. Moreover, the company can use the authorization
according to its need, depending on its capital requirements,
cash flow and share price, among other things. The shares can be
bought back through private placement or from the open
RenaissanceRe regularly deploys its excess capital to enhance
shareholders' wealth. During the fourth quarter of 2012, the
company repurchased 2.8 million equity shares at an average price
of $80.03, totaling $222.5 million.
Moreover, during 2012, RenaissanceRe repurchased 6.4 million
shares at an average price of $77.26, totaling 494.4 million.
Further, from Jan 1, 2013 through Feb 5, 2013 the company
repurchased 1.4 million shares at an average price of $81.29,
aggregating $111.3 million.
RenaissanceRe had earlier increased its share buyback program
to $500 million in Nov 2012 from $406.7 million available on Jul
RenaissanceRe solid cash position is well supportive of its
efforts to buyback shares as well as increase dividend. Also,
returning value to shareholders consistently along with steady
improvement in liquidity should help retain the market confidence
amid the ongoing economic volatility.
Currently, RenaissanceRe carries a Zacks Rank #3 (Hold). Other
property & casualty insurers worth considering are
XL Group plc
Cincinnati Financial Corp.
). All these companies carry a Zacks Rank #1 (Strong Buy).
CINCINNATI FINL (CINF): Free Stock Analysis
PROASSURANCE CP (PRA): Free Stock Analysis
RENAISSANCERE (RNR): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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