Ahead of its fourth-quarter earnings release, the board of property-casualty and life reinsurer – PartnerRe Ltd. approved a 5% hike in its regular quarterly dividend payout to 67 cents per share from the prior 64 cents, now shelling out $2.68 per share annually.
The raised quarterly dividend will be paid on Feb 28, 2014 to shareholders of record as on Feb 18. Following the announcement, shares of PartnerRe rose 2.5% to $100.09 on Thursday. At this closing price, the company’s dividend yield stands at 2.67%, up from prior 2.56%, thereby increasing shareholder return.
PartnerRe has a history of consistent payment of excess capital to its shareholders. The current hike marks the 21st consecutive year of dividend increasesince the company’s commencement. Previously, in Feb 2013, the company had raised its regular dividend by 3% to 64 cents per share from the prior payout of 62 cents.
Meanwhile, in September last year, the board had also sanctioned a new stock repurchase program for 6.0 million shares. The accretive impact of share repurchases also enhances book value and earnings on a per share basis.
Moreover, increased capital deployment reflects the company’s efficient operational synergies and prudent risk management. A low level of debt obligations and zero long-term debt further supports the disposition of excess capital.
PartnerRe is scheduled to release its earnings after the closing bell on Feb 3, 2014.
Meanwhile, the Zacks Consensus Estimate for 2013 have risen 2.7% to $12.90 per share in the last 60 days. Moreover, the estimate for 2014 moved north by 4% to $9.84 a share during the same period.
However, the estimate for 2014 implies a year-over-year plunge of 23.7%, reflecting headwinds from renewals data issued earlier this week. With the estimates showing no clear directional pressure on the stock in the near term, currently PartnerRe bears a Zacks Rank #3 (Hold).
We prefer to remain on the sidelines with regards to PartnerRe for the time being. However, some better-ranked insurers include Aspen Insurance Holdings Ltd. (AHL), RLI Corp. (RLI - Analyst Report) and Endurance Specialty Holdings Ltd. (ENH - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).