To return more value to shareholders, RenaissanceRe Holdings Ltd. (RNR) recently approved an increase in its share repurchase program. With this, the total authorization amount currently stands at $500 million. However, the company’s share price remained almost unchanged following the announcement owing to broader market dynamics.
The aforementioned program is an extension to a previous authorization, under which RenaissanceRe was left with $329.6 million. In Aug 2014, the company had approved a renewal of its share buyback, which had reached the total authorization value to $500 million. Notably, RenaissanceRe purchased 1.6 million shares for $164 million in the third quarter of 2014.
Additionally, the company declared its quarterly cash dividend of 29 cents per share that will be paid on Dec 31, 2014 to shareholders of record as of Dec 15, 2014. In Feb 2014, the company had increased its quarterly dividend by 3.6% from 28 cents paid earlier. RenaissanceRe has increased its dividend for nineteen consecutive years, which reflects its commitment to increase shareholders’ worth. Moreover, the company regularly paid dividends, including $34.8 million paid in the first nine months of 2014.
RenaissanceRe’s financial strength allows it to continuously execute buybacks and pay dividends. As of Sep 30, 2014, the company’s cash from operations stood at $393.4 million, up 2% from that at 2013-end. The increased repurchase authorization and steady dividend payouts are expected to boost investors’ confidence in the stock. Meanwhile, a decrease in share count owing to increased repurchases should spur bottom-line growth.
RenaissanceRe currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the property & casualty insurance space include AmTrust Financial Services, Inc. (AFSI), Arch Capital Group Ltd. (ACGL) and Atlas Financial Holdings, Inc. (AFH). All three stocks sport a Zacks Rank #1 (Strong Buy).
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