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AXIS Capital Okays New Share Buyback Plan, Hikes Dividend
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In a bid to return more value to its shareholders, the board of directors of AXIS Capital Holdings Limited (AXS - Free Report) recently authorized a new share buyback program. The latest authorization will allow the company to utilize up to $1 billion to repurchase its common stock. The authorization, which is effective from Jan 1, 2017, will expire on Dec 31, 2017.
The latest share buyback program will replace the current authorization, which has about $264.9 million remaining and is available through Dec 31, 2016. Notably, the Property and Casualty (P&C) insurer repurchased shares worth $126 million in the third quarter of 2016.
AXIS Capital has a solid track record of capital management, which has enabled it to return excess capital to shareholders through share buybacks and dividends since its initial public offering in 2003. From 2012 through third quarter 2016, the company has returned $2.6 billion capital to shareholders, which is higher than 100% of the total operating earnings in this period combined with the merger termination fee received in 2015.
In addition, the board of directors of AXIS Capital approved an 8% hike in its quarterly dividend. The company will now reward shareholders with a dividend of 38 cents per share against 35 cents paid in the prior quarter.
Based on the closing share price of $63.79 as of Dec 9, the increased dividend translates to a yield of 2.38%. The dividend will be paid on Jan 17, 2017, to the shareholders on record as of Dec 30, 2016.
Notably, this P&C insurer has been consistently increasing dividends each year and its dividend growth trajectory represents its focus on delivering superior returns to shareholders. In fact, the latest dividend hike marks the 13th annual dividend increase since the company’s first dividend announcement. The company’s solid financial condition and robust operational performance have allowed it to make such regular payouts.
Moreover, share repurchases and dividend hikes not only testify to the operational and financial strength of a company, but also make a stock attractive for yield-seeking investors.
Shares of AXIS Capital have surpassed Zacks categorized P&C industry, since its earnings release. The P&C insurer’s stock gained 14.3% compared with 12.6% growth witnessed by the industry.
Strong top-line growth, stellar premium and investment income performance, as well as decline in total expenses contributed to the outperformance. Moreover, a robust liquidity position has helped the company to invest in strategic initiatives, which in turn, has accelerated its growth. AXIS Capital currently holds a Zacks Rank #2 (Buy).
Alleghany Corporation deals with P&C reinsurance and insurance businesses in the U.S. and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.
NMI Holdings offers private mortgage guaranty insurance services in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%.
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AXIS Capital Okays New Share Buyback Plan, Hikes Dividend
In a bid to return more value to its shareholders, the board of directors of AXIS Capital Holdings Limited (AXS - Free Report) recently authorized a new share buyback program. The latest authorization will allow the company to utilize up to $1 billion to repurchase its common stock. The authorization, which is effective from Jan 1, 2017, will expire on Dec 31, 2017.
The latest share buyback program will replace the current authorization, which has about $264.9 million remaining and is available through Dec 31, 2016. Notably, the Property and Casualty (P&C) insurer repurchased shares worth $126 million in the third quarter of 2016.
AXIS Capital has a solid track record of capital management, which has enabled it to return excess capital to shareholders through share buybacks and dividends since its initial public offering in 2003. From 2012 through third quarter 2016, the company has returned $2.6 billion capital to shareholders, which is higher than 100% of the total operating earnings in this period combined with the merger termination fee received in 2015.
In addition, the board of directors of AXIS Capital approved an 8% hike in its quarterly dividend. The company will now reward shareholders with a dividend of 38 cents per share against 35 cents paid in the prior quarter.
Based on the closing share price of $63.79 as of Dec 9, the increased dividend translates to a yield of 2.38%. The dividend will be paid on Jan 17, 2017, to the shareholders on record as of Dec 30, 2016.
Notably, this P&C insurer has been consistently increasing dividends each year and its dividend growth trajectory represents its focus on delivering superior returns to shareholders. In fact, the latest dividend hike marks the 13th annual dividend increase since the company’s first dividend announcement. The company’s solid financial condition and robust operational performance have allowed it to make such regular payouts.
Moreover, share repurchases and dividend hikes not only testify to the operational and financial strength of a company, but also make a stock attractive for yield-seeking investors.
Shares of AXIS Capital have surpassed Zacks categorized P&C industry, since its earnings release. The P&C insurer’s stock gained 14.3% compared with 12.6% growth witnessed by the industry.
Strong top-line growth, stellar premium and investment income performance, as well as decline in total expenses contributed to the outperformance. Moreover, a robust liquidity position has helped the company to invest in strategic initiatives, which in turn, has accelerated its growth. AXIS Capital currently holds a Zacks Rank #2 (Buy).
Stocks to Consider
Investors interested in other stocks from the same space might consider Alleghany Corporation , NMI Holdings, Inc. (NMIH - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alleghany Corporation deals with P&C reinsurance and insurance businesses in the U.S. and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.
NMI Holdings offers private mortgage guaranty insurance services in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%.
Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>