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Chubb (CB) Stock Gains as Board Okays Dividend Increase

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Shares of Chubb Limited (CB - Free Report) gained 0.3% in the last trading session as its board of directors approved a 2.6% hike in its dividend. The latest rise marks 28 straight years of dividend increase.

Shareholders of record on Jun 18 will receive the increased quarterly dividend of 80 cents per share on Jul 9. Based on the closing price of $166.71 as of May 22, the company’s dividend yield is 1.9%, much above the industry average of 0.5%.

This Zacks Rank #3 (Hold) insurer boasts one of the largest product portfolios in the global insurance industry. It is focusing on cyber insurance that has immense room for growth, putting in efforts to capitalize on the potential of middle-market businesses, both domestic and international, with traditional core package as well as specialty product. Improving pricing environment, new business growth and high renewal rates along with other positives should help it retain the momentum of effective capital deployment.

It has a strong capital position, with sufficient cash generation capabilities. Its underwriting and investment performance support strong operating cash flow. Riding on its strong capital position, the company also buys back shares apart from paying dividends. In February 2021, the board approved an increase to the November 2020 share repurchase program of $1 billion to a total of $2.5 billion, effective through Dec 31, 2021. As of Apr 29, 2021, $1.91 billion in share repurchase authorization remained through Dec 31, 2021.

Shares of Chubb have gained 8.3% year to date, underperforming the industry’s rise of 20.1%. The company’s superior underwriting discipline and sound capital structure should help it shares trend higher.



Among other insurers, RLI Corp. (RLI - Free Report) and Radian Group (RDN - Free Report) hiked its quarterly dividend by 4.1% and 12%, respectively.  Last month, the board of directors of The Travelers Companies (TRV - Free Report) approved a 4% hike in its quarterly dividend.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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