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American Financial (AFG) Board Approves Special Dividend
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American Financial Group’s (AFG - Free Report) board of directors approved a special cash dividend of $4.00 per share. This latest approval marks the third special dividend approved by the board so far this year. The company has been paying out special dividends since 2012.
With the latest approval, the company will be paying out 15 special dividends in 10 years. Shareholders of record as of Sep 28 will receive the special dividend on Oct 5. Per Co-CEOs S. Craig Lindner and Carl H. Lindner III, the payment of this special dividend is a key component of the company’s capital management strategy.
This Zacks Rank #1 (Strong Buy) property and casualty insurer estimates spending $340 million for the special dividend, which is backed by its strong financial position. In June 2021, the company paid a special, one-time cash dividend of $1.2 billion or $14.00 per share, concurrent with the sale of its Annuity business. In August, the company paid out another $2.00 in special dividend.
Also in August, the company’s board of directors approved a 12% hike in its annual dividend, marking the 14th straight year of dividend increase. Its dividend yield of 1.6% betters the industry average of 0.4%, making the stock an attractive pick for yield-seeking investors.
Besides dividend payouts, American Financial opportunistically buys back shares. In the first half of 2021, the company returned $148 million to its shareholders through share buybacks.
American Financial, a niche player in the P&C and annuity markets, has traditionally maintained moderate adjusted financial leverage with good cash flow and significant excess capital. The robust operating profitability at the P&C segment, a stellar investment performance, and effective capital management support shareholder returns.
Focus on its Specialty P&C segment, consistent price increase in the P&C business, better industry fundamentals, a high renewal ratio, favorable combined ratio, and strong capital management are likely to help the company in sustaining the streak.
Shares of American Financial have rallied 47.6% year to date, compared with the industry’s growth of 16%. The company’s superior underwriting discipline and sound capital structure should help it retain the momentum.
Image: Bigstock
American Financial (AFG) Board Approves Special Dividend
American Financial Group’s (AFG - Free Report) board of directors approved a special cash dividend of $4.00 per share. This latest approval marks the third special dividend approved by the board so far this year. The company has been paying out special dividends since 2012.
With the latest approval, the company will be paying out 15 special dividends in 10 years. Shareholders of record as of Sep 28 will receive the special dividend on Oct 5. Per Co-CEOs S. Craig Lindner and Carl H. Lindner III, the payment of this special dividend is a key component of the company’s capital management strategy.
This Zacks Rank #1 (Strong Buy) property and casualty insurer estimates spending $340 million for the special dividend, which is backed by its strong financial position. In June 2021, the company paid a special, one-time cash dividend of $1.2 billion or $14.00 per share, concurrent with the sale of its Annuity business. In August, the company paid out another $2.00 in special dividend.
Also in August, the company’s board of directors approved a 12% hike in its annual dividend, marking the 14th straight year of dividend increase. Its dividend yield of 1.6% betters the industry average of 0.4%, making the stock an attractive pick for yield-seeking investors.
Besides dividend payouts, American Financial opportunistically buys back shares. In the first half of 2021, the company returned $148 million to its shareholders through share buybacks.
American Financial, a niche player in the P&C and annuity markets, has traditionally maintained moderate adjusted financial leverage with good cash flow and significant excess capital. The robust operating profitability at the P&C segment, a stellar investment performance, and effective capital management support shareholder returns.
Focus on its Specialty P&C segment, consistent price increase in the P&C business, better industry fundamentals, a high renewal ratio, favorable combined ratio, and strong capital management are likely to help the company in sustaining the streak.
Shares of American Financial have rallied 47.6% year to date, compared with the industry’s growth of 16%. The company’s superior underwriting discipline and sound capital structure should help it retain the momentum.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks in the same space include Axis Capital Holdings Limited (AXS - Free Report) , Cincinnati Financial Corporation(CINF - Free Report) , and Everest Re Group , all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital delivered an earnings surprise of 39.86% in the last reported quarter.
Cincinnati Financial delivered an earnings surprise of 80.81% in the last reported quarter.
Everest Re Group delivered an earnings surprise of 62.56% in the last reported quarter.