Back to top

Analyst Blog

In order to boost shareholder value, EMC Insurance Group Inc. (EMCI - Snapshot Report) increased its quarterly dividend by 9.5%. This translates into a quarterly cash dividend of 23 cents per share, up from 21 cents per share paid on Sep 17, 2013. The increased dividend will be paid on Dec 3, 2013, to shareholders of record as of Nov 25, 2013.

Based on the closing share price of $29.89 on Nov 15, 2013, the increased dividend implies a dividend yield of 3.08%. The current dividend yield is better than the industry yield of 1.85% and  that of some other property and casualty insurers, RLI Corp. (RLI - Analyst Report) with a yield of 1.38%, ACE Limited (ACE - Analyst Report) with a yield of 2.07% and Montpelier Re Holdings Ltd. (MRH - Analyst Report) with a yield of 1.64%.

This dividend represents the hundred and twenty eighth consecutive quarter of dividends declared by EMC Insurance. Earlier in Nov 2012, the board of EMC Insurance approved a 5% increase in quarterly dividend to 21 cents from 20 cents.

This dividend hike represents the financial strength and long-term outlook of the company. EMC Insurance will require $3.02 million every quarter for the dividend payment, based on the outstanding share count of 13.1 million as of Sep 30, 2013. The company has ample liquidity for the payment, with total cash of $600.9 million as of Sep 30, 2013.

Moreover, the board of directors of EMC Insurance gave the nod for a reduction in the cost of the excess of loss reinsurance protection (from 9% of total assumed reinsurance premiums to 8%) provided for 2014 to the reinsurance wing of the company – EMC Reinsurance Company.  

EMC Insurance currently carries a Zacks Rank #3 (Hold). However, RLI Corp. and Montpelier both carry a favorable Zacks Rank #1 (Strong Buy) while ACE Limited carries a Zacks Rank #2 (Buy) and appear impressive.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%
RF MICRO DE… RFMD 11.76 +2.31%