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Everest Re to Share More Profits, Increases Dividend by 21%

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The board of directors of Everest Re Group, Ltd . RE approved a 21% hike in its quarterly dividend.

The company will pay out the meatier dividend of $1.15 per share on Dec 16, 2015 to shareholders of record on Dec 2. Based on yesterday's closing price of $186.06, the annualized dividend of $4.60 per share currently has a yield of 2.47%, which is above the sector average of 2.24%.

Everest Re has a track record of increasing its dividend. The last hike was approved in Nov 2014, when the company had increased its dividend by 27% to 95 cents per share.

Its financial position, cushioned with sustained solid operational performance, will support the increased payout. The company generated $987.5 million from operating activities through the first nine months of 2015 (up 6.7% year over year), had cash and cash equivalents of $17.6 billion (up 1.1% from 2014 end level) and $8.3 billion in retained earnings (up 6.4% from 2014 end level).

Besides, the company also engages in share buybacks that in turn enhances shareholders' value. In the last quarter, Everest Re spent $200 million on buying back 1.1 million shares. The company is left with 4.5 million shares available for repurchase.

To its credit, this Zacks Rank #3 (Hold) property and casualty insurer delivered positive surprises in three of the last four quarters, with an average beat of 13.6%. In the last reported quarter, Everest Re outpaced the Zacks Consensus Estimate by 6.81%.

We believe that a disciplined underwriting culture, astute capital management and a conservative and high-quality balance sheet bode well for the company's long-term growth and operating results. The company's dividend growth track would also be benefited by its sound fundamentals.

Stocks to Consider

Some better-ranked property and casualty insurers are Primerica, Inc PRI , Assured Guaranty Ltd AGO and Old Republic International Corporation ORI . While Assured Guaranty and Old Republic International sport Zacks Rank #1 (Strong Buy), Primerica shares the Zack Rank with American Equity.

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EVEREST RE LTD (RE): Free Stock Analysis Report

ASSURED GUARNTY (AGO): Free Stock Analysis Report

OLD REP INTL (ORI): Free Stock Analysis Report

PRIMERICA INC (PRI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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