In a bid to share more profit with its shareholders, the board of directors of Chubb LimitedCB recently announced a 3% hike in quarterly dividend to 71 cents per share. Shareholders on record as of Jun 30, will have the meatier dividend in their pockets on Jul 1, 2014. Shares gained 0.56% in the trading session on May 18, reflecting investor confidence on the stock.
The annualized dividend of $2.84 per share translates to a yield of 2% based on the closing price of $138.56 on May 18, 2017. This is above the industry average of 1.25%. Chubb has an impressive track of raising dividend each year. In fact, the company has been paying dividends each quarter since it became a public company in 1993. The latest increase marked 24th straight year of dividend hikes.
This Zacks Rank #3 (Hold) property and casualty insurer has more than doubled its dividend since 2010, with its yield outperforming the industry average. Chubb intends to pay out around 30% of its operating earnings to shareholders.
Apart from dividend hikes, the company resorts to share buybacks. The company has $1 billion buyback program under its authorization. Chubb boasts a strong capital position, which helps it to engage in such shareholder-friendly moves. The company's total capital position now exceeds $60 billion.
The company's strategic endeavors to enhance shareholders' value make it an attractive pick for yield seeking investors. Shares of Chubb have gained 4.35%, outperforming the Property and Casualty insurance industry's decline of 0.13%. We believe that such moves will continue to drive shares higher.
Dividend hikes and share repurchases seem to be a well-accepted strategy among insurers to solidify investor confidence on their stock. Recently, W.R. Berkley Corporation WRB approved a 7.7% hike in its quarterly dividend as well as a special dividend of 50 cents per share. Principal Financial Group, Inc. PFG approved the repurchase of shares of up to $250 million. The board of directors of CNO Financial Group CNO approved a 13% hike in its quarterly dividend and $300 million share buyback program.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.