Shares of Endurance Specialty Holdings Ltd. ENH gained 0.9% in the last trading session after its board of directors approved a 2.9% increase in its quarterly dividend to 35 cents per share. The Bermuda-based property and casualty insurer and reinsurer will pay the new dividend on Mar 31, 2015 to shareholders of record on Mar 17.
The latest increase marks the fifth straight year of dividend hike by Endurance Specialty. The company has increased its dividend at a 5-year CAGR of 6.9%.
Based on yesterday’s closing price of $63.57, the company’s dividend yield is 2.20%, much above the industry average of 1.80%.
With about 43 million shares outstanding at the end of the fourth quarter, Endurance Specialty has to dish out $15 million quarterly or about $60 million annually. Its strong financial position will support its payout. The company, in 2014, generated $38.5 million from operating activities (up 12% over 2013) and had $2.4 billion in retained earnings (up 12% from 2013 end) as it exited 2014.
Endurance Specialty has maintained its track of paying quarterly dividends and increasing the dividend payout each year. A sustained solid operational performance at the company continues to support its capital deployment initiative and in turn increase shareholders’ value.
To its credit, this Zacks Rank #1 (Strong Buy) insurer has delivered positive surprise in three of the last four quarters with an average of 27.3%.
Several insurers have hiked their dividend to reward their shareholders. Last month, Old Republic International Corporation ORI increased its quarterly dividend by 1.4% while RenaissanceRe Holdings Ltd. RNR increased its quarterly dividend by approximately 3.5%. Another insurer, Argo Group International Holdings, Ltd.AGII also increased its quarterly cash dividend by 11.1% last week.
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