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RLI Approves Special Dividend to Boost Shareholder Value

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Shares of RLI Corp. (RLI - Free Report) gained 2.3% in the last trading session, reflecting shareholders’ optimism as the board of directors recently gave nod to a special cash dividend of $1.00 per share. The company has been paying special dividends since 2011 and the latest approval marks the 11th straight special dividend. The insurer paid out a special dividend of $1.00 in the last year.

RLI Corp. estimates dishing out $45 million for the special dividend, which is well-supported by its strong financial position. The specialty property and casualty underwriter maintains a solid balance sheet, with sufficient liquidity and strong cash flow. Over the last ten years, the P&C insurer’s total cumulative dividends amounted to more than $1.1 billion.

Concurrently, the board of directors announced a regular quarterly cash dividend of 24 cents per share. Notably, in May 2020, the company raised its quarterly dividend by 4.3%. It has been increasing the dividend for the past 45 years, which has grown 5.1% in the past 10 years. Its dividend yield of 1% betters the industry average of 0.4%. Recently, Assurant, Inc.’s (AIZ - Free Report) board of directors approved a 5% hike.

Both the special and the quarterly dividends will be paid out on Dec 18 to shareholders of record as of Nov 30, 2020.

RLI Corp. is one of the industry’s most profitable P&C writers, with an impressive track record of delivering 24 consecutive years of underwriting profitability. The company stays focused to maintain long-term industry-leading combined ratios and book value growth. Its diversified product portfolio, a strong local branch-office network, a focus on specialty insurance lines growing via organic opportunities and acquisitions financial strength should continue to help it boost shareholders’ returns.  RLI Corp boasts shareholders’ returns of 15.8% in the past 20 years, outperforming the S&P 500 average of 6.4% and the S&P P&C Index’s 7.3%.

Shares of RLI Corp have gained 11.2% year to date, outperforming the industry’s decline of 6%. The company’s superior underwriting discipline and sound capital structure should help it retain the momentum.

 


 

It carries a Zacks Rank #5 (Strong Sell) at present.

Stocks to Consider

Some better-ranked companies from the same space are Alleghany Corporation (Y - Free Report) and American Financial Group (AFG - Free Report) .
    
Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2 (Buy).

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