Back to top

Analyst Blog

In a concerted effort to enhance shareholders' value, ACE Limited (ACE - Analyst Report) intends to boost its dividend. The board of directors will propose a 4% increase in the quarterly dividend at the extraordinary general meeting scheduled on May 16, 2013.

ACE Limited, if approved, will pay a quarterly dividend of 51 cents ($2.04 on an annualized basis), up from 49 cents ($1.96 on an annualized basis). Previously, in May 2012, the board announced a 4.25% increase in the quarterly dividend from 47 cents ($1.88 on an annualized basis).

ACE has maintained a consistent track record of paying quarterly dividends and the current dividend is not an exception. The company also has a record of increasing dividend each year. Its dividend yield is 2.30%, much above the industry yield of 1.63% and that of its peer RLI Corp.'s (RLI - Analyst Report) yield of 1.86%.

ACE appears to have a strong capital and liquidity position, helping it increase the quarterly dividend. The cash balance of ACE Limited at 2012-end totaled $615 million, while cash from operation approximated $4 billion.

A few property and casualty insurers like Chubb Corp. (CB - Analyst Report) and XL Group plc (XL - Analyst Report), among others, have also hiked their dividends recently. While the board of directors of Chubb approved a 7.3% dividend increase on Feb 28, the board of directors of XL Group approved a 27% dividend hike on Feb 22.

ACE Limited reported robust fourth-quarter results with operating income coming in at $1.43 per share, ahead of the Zacks Consensus Estimate by 14 cents. Earnings, however, declined 25% year over year, as the reported quarter was hugely affected by cat losses incurred due to Superstorm Sandy.

Nevertheless, prudent underwriting practices, international presence, diversified product offering and a sturdy balance sheet managed to limit the adverse effect. It continues to expand its international footprint with acquisitions in Indonesia and Mexico. The company also remains focused on enhancing its earnings, ROE and book value per share.

ACE Limited currently carries a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

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 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 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
PANTRY INC PTRY 21.02 +2.09%
INTEL CORP INTC 35.15 +1.88%
PIPER JAFFR… PJC 54.54 +1.70%