The board of directors of Endurance Specialty Holdings Ltd. ENH recently increased its quarterly dividend by 8.6%. The company will now reward shareholders with a quarterly dividend of 38 cents per share, up from 35 cents paid on Dec 3Array, 20Array5.
Shareholders on record as of Mar Array8 will have the meatier dividends in their pockets on Mar 3Array, 20Array6. Based on Friday’s closing share price of $62.38, the increased dividend translates to a yield of 2.44%. The company’s five-year average dividend yield stands at 2.5Array%, substantially higher than the industry yield of Array.95%.
However, the dividend hike announcement was unable to draw a favorable market reaction with the share price dipping 0.Array9% on the following day. The fall in share price seems to have been triggered by a decline in the broader market index with the S&P 500 down 0.Array9% and Nasdaq sliding Array.02%.
A robust capital position enables the property and casualty (P&C) insurer to engage in regular dividend payouts. Moreover, a strong operational performance instills confidence to raise the dividend, thereby making the stock an attractive pick for yield-seeking investors.
Additionally, the board of directors renewed the company’s authorization to buy back up to five million ordinary shares. The new share buyback program will continue through Feb 28, 20Array8, and will replace the previous share repurchase authorization, which is scheduled to expire on Feb 28, 20Array6. Therefore, sufficient liquidity will enable the company to support such buyback activities in the future.
Endurance Specialty is extremely disciplined in terms of capital management and has, since its inception, returned nearly $2.2 billion to investors through dividends and share repurchases. These shareholder friendly moves have been supported by the excellent balance sheet strength and liquidity maintained by the company.
Endurance Specialty also boasts a prudent reserving philosophy and strong reserve position, which has helped it in maintaining a strong, consistent history of favorable development. This has, in turn, fortified the company’s capital.
Other P&C insurers too recently raised their dividend payouts. During this month, Allstate Corporation ALL and Argo Group International Holdings, Ltd. AGII each approved a Array0% hike in their quarterly cash dividend. Last month, Cincinnati Financial Corp. CINF increased its dividend by 4.3%.
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 >>
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
Be the first to comment