Recently, the board of
United Fire Group, Inc.
) approved a 20% increase in its quarterly cash dividend to 18
cents per share from 15 cents paid earlier. The new dividend will
be paid on Jun 14, 2013 to shareholders of record as of May 31,
United Fire will require $4.6 million to pay the dividend,
based on the outstanding share count of 25.3 million as of Mar
31, 2013. The company has ample financial resources for the
payment, with cash and cash equivalents of $101.9 million as of
Mar 31, 2013.
Moreover, United Fire generated operating cash flow of $31.7
million in the first quarter of 2013, which is more than enough
to cover the dividend payment.
The strong financial position allowed the company to raise its
dividend to boost shareholder value. United Fire has been
consistently paying quarterly cash dividends since Mar 1968.
However, the company revealed that it prefers investing in
profitable business ventures for enhancing shareholder value and
will lay more emphasis on those opportunities.
This is the first dividend hike since Nov 2007, when United
Fire increased the dividend to 15 cents from 13.5 cents. The new
dividend implies an annual dividend yield of 2.4%, based on the
closing share price of $29.52 as of May 15, 2013.
United Fire currently carries a Zacks Rank #1 (Strong Buy).
Other property and casualty insurers with the same Zacks Rank are
Montpelier Re Holdings Ltd.
Hilltop Holdings Inc.
AXIS Capital Holdings Limited
AXIS CAP HLDGS (AXS): Free Stock Analysis
HILLTOP HLDGS (HTH): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
UNITED FIRE GRP (UFCS): Free Stock Analysis
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