In a concerted effort to share more profits with its
XL Group plc
) hiked its quarterly dividend and approved a new share
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XL GROUP PLC (XL): Free Stock Analysis Report
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The board of directors recently approved a 14.3% hike in its
quarterly dividend. The company will now pay a dividend of 16
cents per share, up from 14 cents paid in Dec 31 2013. The
increased dividend will be paid on Mar 31, 2014 to the
shareholders of record on Mar 14.
Over the past, XL Group has paid regular quarterly dividends and
has consistently increased the same each year. Based on Friday's
closing price, XL Group's dividend yield is 2.2%. The previous
dividend hike had been effectuated in Feb 2013, wherein the board
had approved a 27.3% increase.
Besides the dividend raise, the board also approved a buyback
program, authorizing XL Group to repurchase shares worth $1
billion. The current program includes about $200 million worth of
shares remaining under the previous authorization. The company
had spent $150 million to buy back 4.9 million shares in 2013,
bringing the 2013 tally to 22.5 million shares repurchased for
The dividend hike and new authorization by XL Group is duly
supported by the company's sturdy financial position with cash
and cash equivalent of $1.8 billion at 2013-end. A solid
operational performance continues to cushion the company's sturdy
XL Group has been on an uptrend since it reported solid
fourth-quarter earnings on Feb 5. Shares have gained almost 5.3%
since then. With the company's efforts to boost shareholder
value, we expect investor confidence to grow further.
We also expect analysts to revise estimates upward and in turn,
affect the Zacks Rank positively, following the proposal to
increase dividend and the new share buyback approval. XL Group
presently carries a Zacks Rank #3 (Hold).
Several insurers are treading the same path as XL Group by
announcing dividend hikes and/or share repurchase programs. These
strategies help retain investor confidence as well as attract new
Old Republic International Corporation
) increased its quarterly dividend by 1.4% to 20 cents per
FBL Financial Group, Inc
) hiked its dividend by a substantial 133% to 35 cents per share
while also approving a $50 million share buyback program.
AmTrust Financial Services, Inc
) raised its dividend by a significant 43% and will consequently
pay a quarterly dividend of 20 cents per share.