The board of directors of Chubb Limited CB recently authorized a share buyback program to return more value to investors. The latest authorization will allow the company to spend up to $1 billion to repurchase its common stock.
The company’s previous share repurchase program, approved on Nov 17, 2016, will expire on Dec 31, 2017. Of this, the company had already bought back $707 million in the first nine months of 2017. Therefore, with the new authorization, the company now has $1.3 billion left under the buyback program.
The property and casualty (P&C) insurer remains committed toward boosting shareholders’ value through such share repurchases and dividends. A sustained operational performance over the years has enabled the insurer to take part in such endeavors, which in turn raise optimism among investors as well. Moreover, the company has returned approximately $1.7 billion in the form of share buybacks and dividends throughout the first nine months of this year.
We remain optimistic about Chubb’s efforts in further improving its capital as well as liquidity position that will not only allow the company to return more value to investors but also accelerate the company’s growth in the near term.
Chubb remains focused on its attempts to efficient and prudent capital deployment. This balanced approach toward the same supports the company’s diversified and integrated businesses, meets the needs of clients and creates a long-term shareholder value.
Share repurchases benefit the company’s earnings per share, book value as well as shareholder equity as shares outstanding reduce. Therefore, share repurchase programs buoy hope among investors and boost their confidence in the stock.
Zacks Rank and Share Price Movement
Chubb carries a Zacks Rank #3 (Hold). Shares of Chubb have gained 9.9% year to date, underperforming the industry’s rally of 17.5%. However, we expect premium growth, discreet strategic initiatives and a robust capital position to turn the shares around in the near term.
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Stocks to Consider
Some better-ranked stocks from the same space are CNA Financial Corporation CNA, Infinity Property and Casualty Corporation IPCC and NMI Holdings, Inc. NMIH, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CNA Financial provides commercial property and casualty insurance products primarily in the United States. The company came up with positive surprises in three of the last four quarters with an average beat of 39.87%. Shares of the company have gained 25.7% year to date.
Infinity Property and Casualty Corporation provides personal automobile insurance products in the United States. The company pulled off positive surprises in three of the last four quarters with an average beat of 300.65%. Shares of the company have rallied 20.5% year to date.
NMI Holdings provides private mortgage guaranty insurance services in the United States. The company delivered a four-quarter average positive surprise of 11.75%. Shares of the company have surged 63.4% year to date.
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