ACE Limited (ACE) announced that its shareholders, in the Annual General Meeting, have approved a 6.1% increase in the quarterly dividend. Earlier, in February, the board of directors announced its intention to propose the dividend hike.
ACE will now pay a quarterly dividend of 35 cents ($1.40 on an annualized basis), up from 33 cents ($1.32 on an annualized basis) paid on April 22, 2011. Previously, the board increased the dividend announced – a 6.5% increase in the quarterly dividend to 33 cents ($1.32 on an annualized basis), up from 31 cents ($1.24 on an annualized basis).
ACE has had a consistent track record of paying quarterly dividends and the current dividend is not an exception to the case. The company also has a record of increasing its dividend every year. It has only lowered its dividend when the world faced the economic recession, but continued making dividend payments. Its dividend yield is 2.02%.
The board of directors announced that shareholders of record as on June 30, 2011 will be entitled to payment of the first increased dividend on July 21, 2011.The quarterly dividend will be paid out of legal reserves.
ACE Limited reported a first-quarter 2011 operating income of 79 cents per share, beating the Zacks Consensus Estimate by 13 cents. The better-than-expected performance stemmed from strong renewal persistency, positive client payroll and higher sales. The company guided its 2011 operating income to a range of $5.40 and $5.70 per share.
The Zacks Consensus Estimate for second-quarter 2011 is $1.88 per share. For full years 2011 and 2012, the Zacks Consensus Estimates are, respectively, $6.31 per share and $7.37 per share.
ACE Limited is well poised on account of its strong international presence, diversified product offering, risk management, conservative underwriting practice and strong reserves.
The company is also wrapping up the acquisitions it made. ACE Limited remains focused on expanding its footprint in faster growing economies. We expect the acquisitions to turn around premium writings and help the company grow.
We maintain our long-term Neutral recommendation on ACE Limited. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
Headquartered in Zurich, Switzerland, ACE Limited, through its subsidiaries, provides a range of insurance and reinsurance products to commercial and individual customers worldwide. The company competes with American International Group Inc. (AIG) and The Travelers Companies Inc. (TRV).
ACE LIMITED (ACE): Free Stock Analysis Report
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