Credit: Shutterstock photoIn order to return more to its shareholders, the board of directors of RenaissanceRe Holdings Ltd.RNR approved an increase in its share buyback program. With this, the total authorization now stands at $500 million.
Earlier, the company's board had approved an increase in its share repurchase program in Aug 2015, thereby bringing the total authorization to $500 million. RenaissanceRe repurchased shares worth $211.5 million in the first nine months of 2015 and an additional $30.6 million through Nov 3, 2015. Thereafter, the company was left with shares worth $282.6 million for repurchases. Thus, the latest amendment in buyback authorization accounts for a $217.4 million increase.
Additionally, the company's board of directors declared a quarterly cash dividend of 30 cents per share, which will be paid on Dec 31 to shareholders on record as of Dec 15, 2015.
RenaissanceRe remains focused on enhancing its shareholders' value, while maintaining adequate liquidity for its business strategies. The company has enough liquidity to support its share buybacks and dividend payouts without compromising its financial strength and credit ratings.
Cash and cash equivalents surged 74.5% year over year to $524.5 million as of Sep 30, 2015. Book value was up 8.1% from that as of Dec 31, 2014 to $97.41 as of Sep 30, 2015.
While the increased repurchase authorization will boost investor confidence, its execution will reduce share count and therefore should spur bottom-line growth.
RenaissanceRe currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the property and casualty insurance space are Alleghany Corporation Y , Cincinnati Financial Corp. CINF and Hallmark Financial Services Inc. HALL . All three stocks sport a Zacks Rank #1 (Strong Buy).
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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.
