Back to top

Analyst Blog

United Fire Group, Inc. (UFCS - Snapshot Report) increased its quarterly dividend by 11% to 20 cents per share. The increased dividend will be paid on Jun 16, 2014 to shareholders of record on Jun 2.

United Fire Group’s annualized dividend of 80 cents per share yields 2.90% based on the closing price of $27.21 on May 21, 2014 and outperforms the industry average of 2.30%.

The recent hike marks the second consecutive increase by United Fire Group since 2008. Last May, the board approved a 20% increase in its quarterly dividend to 18 cents. Nonetheless, the property and casualty insurer has been paying quarterly dividends consistently since Mar 1968. A sturdy financial position backed by continued solid operational performance positions it well to increase payouts.

United Fire Group exited the first quarter with cash and cash equivalents of $66.7 million and cash from operations was $18.5 million. Retained earnings came in at a solid $495.8 million (up 1.8% from 2013 end). Based on about 25.4 million shares outstanding on Mar 31, 2014, United Fire Group needs to dish out about $5.1 million as quarterly dividend. Its solid liquidity supports the payout quite well.

There was no earnings momentum witnessed in the last seven days. In fact, the Zacks Consensus Estimate declined 2.7% following a weak first quarter earnings results wherein it missed the expectation by 36% and lagged the year-ago earnings by 44%.

With the news of a dividend hike, which retains investor confidence as well as attracts potential investors, we expect analysts to move their estimates northward and a consequent rise in the Zacks Rank. The stock presently carries a Zacks Rank #3 (Hold).

Other property and casualty insurers in news for increasing their dividends include ACE Ltd. (ACE - Analyst Report) which approved a dividend hike of 3% to 65 cents per share, W.R. Berkley Corp. (WRB - Analyst Report) which announced a 10% hike in the quarterly dividend to 44 cents per share, and RLI Corp. (RLI - Analyst Report) which hiked its quarterly dividend by 5.9% to 18 cents per share.

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
ERBA DIAGNO… ERB 3.55 +11.64%
CHINA BIOLO… CBPO 55.57 +7.40%
BITAUTO HOL… BITA 96.14 +5.58%
LUXOFT HOLD… LXFT 38.77 +3.64%
INSITE VISI… INSV 0.30 +3.41%