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In an effort to increase shareholders’ return, the board of directors of Everest Re Group Ltd. (RE - Analyst Report) approved a 56% increase in its regular quarterly dividend to 75 cents per share from 48 cents paid during third quarter 2013.

The new dividend will be paid on or before Dec 18, 2013 to shareholders of record as on Dec 4, 2013.

With the increased dividend, Everest Re’s dividend yield stands at 1.22%, though still lower than the industry dividend yield of 2.97%. Also, the company’s 5-year average dividend growth rate of 2.18%, compares unfavorably with  industry growth rate of 3.49%.

Nonetheless, this dividend increase comes on the back of Everest Re’s robust capital. This Zacks Rank #2 (Buy) stock generated strong operating cash flows of $776 million for the first nine months of 2013, compared to $479 million in 2012.

Everest Re, however, is well-known for its active capital management that has driven shareholder’s return. The company has historically used excess capital for buying back its shares. The company increased its share repurchase authorization by 5 million in second quarter 2013.

Over the first nine months of 2013, Everest Re returned $620 million to shareholders in dividends and stock repurchases.

Going forward, we believe that a strong franchise, seasoned management team, disciplined underwriting culture, astute capital management, conservative and high quality balance sheet bode well for the company’s long term growth, to enable it to maintain strong operating results. This will consequently help the company to maintain its dividend growth track.

Insurers Montpelier Re Holdings Ltd. (MRH - Analyst Report), EMC Insurance Group Inc. (EMCI - Snapshot Report), HCI Group, Inc. (HCI - Snapshot Report) all have increased dividend recently.

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