On Nov 24, 2015, shares of RLI Corp.RLI hit a 52-week high of $63.22, driven by better-than-expected third-quarter 2015 results and the announcement of a special dividend. With about 0.1 million shares exchanging hands in the last trading session, the stock finally closed at $63.02, gaining 0.4%. Year to date, the stock has returned 27.57% comparing favorably with 1.47% by the S&P 500.
RLI Corp's operating earnings of 70 cents per share in the third quarter surpassed the Zacks Consensus Estimate and improved year over year. The sound performance came on the back of a higher top line and lower expenses. With respect to the surprise trend, the Zacks Rank #1 (Strong Buy) property and casualty insurer delivered positive surprises in three of the last four quarters, with an average beat of 18.13%.
Revenues also fared well on both counts as premiums improved on better performances at the Casualty and Surety segments.
While underwriting income increased, combined ratio also exhibited an improvement.
Riding on a solid operational performance, the company has also strengthened its balance sheet. Debt level at quarter end was flat with the 2014-end level and cash balance improved over the same time period. Book value also improved from the 2014-end level.
RLI Corp also remains focused on enhancing its shareholders' value. To that end, the board of directors approved a special dividend of $2.00 per share. This is in addition to the quarterly dividend of 19 cents per share. Notably, RLI Corp has paid back more than $640 million to its shareholders in the last five years.
A sturdy third-quarter performance drove the Zacks Consensus Estimate higher on upward revisions in the last 60 days. The Zacks Consensus Estimate increased 6.5% to $2.63 for 2015 and 3.9% to $2.39 for 2016.
Other Stocks to Consider
Investors interested in the property and casualty insurance space can consider some other stocks like The Chubb Corp. CB , Cincinnati Financial Corp. CINF and Hallmark Financial Services Inc. HALL . Each of these stocks also sports a Zacks Rank #1.