Back to top

Image: Bigstock

The Hanover Insurance (THG) Ups Dividend to Share More Profit

Read MoreHide Full Article

The board of directors of The Hanover Insurance Group, Inc. (THG - Free Report) approved a 7% hike in its quarterly dividend in its continued effort to boost shareholders value. With this, the payout now stands at 75 cents per share compared with the earlier payout of 70 cents per share.

Based on the stock’s Dec 6 closing price of $129.08, the new dividend will yield 2.3%, better than the industry average of 0.4%. With 35.7 million shares outstanding, this Zacks Rank #3 (Hold) company needs to dish out about $28 million quarterly to pay the dividend. Shareholders of record on Dec 16, 2021 will receive the meatier dividend on Dec 30.

The Hanover Insurance has increased dividends each year, reflecting operational excellence and commitment to return value to its shareholders. THG’s dividend witnessed an 11-year CAGR of 10.5%.

Prudent management of business mix, focus on the growth of the most profitable product lines, stable retention, better pricing and strong market presence should support The Hanover Insurance has maintained the streak of raising dividends each year.

The Hanover Insurance Group prudently deploys capital in profitable business initiatives and returns the excess capital to shareholders. Apart from dividend hikes, THG also engages in share buybacks. It had $381 million available under its authorization as of Sep 30, 2021.

Shares of The Hanover Insurance Group have gained 12.4% in a year  compared the industry’s increase of 8.5%. Operational excellence and solid capital position should help shares retain momentum.

Zacks Investment ResearchImage Source: Zacks Investment Research

Given the solid capital level of the insurance industry and an improving operating backdrop favoring strong operational performance, insurers like AXIS Capital Holdings Limited (AXS - Free Report) , Primerica, Inc. (PRI - Free Report) and Lincoln National Corporation (LNC - Free Report) have resorted to effective capital deployment to enhance shareholders’ value.

The board of directors of AXIS Capital approved a 2.4% hike in its annual dividend in its continued effort to boost shareholders value backed by balance sheet strength.

AXIS Capital should be able to continually enhance shareholders value, riding on Specialty Insurance, Reinsurance plus Accident and Health, exiting underperforming lines, investing in more attractive markets, and entering new markets thus improving portfolio mix and underwriting profitability.

The board of directors of Primerica authorized a $275 million share buyback program through next year. Operational excellence backed by solid market presence, growing business and a strong business model should continue to support Primerica in generating enough capital to return to shareholders continually.

Primerica’s total stockholder return has continually outperformed the S&P 500 Index over the last five years. It has also raised dividends 10 times in the last nine years.

Lincoln National’s board approved a $1.5 billion share buyback program. A robust financial position driven by a sound balance sheet and strong cash generation capabilities over the years has enabled Lincoln National to engage in accelerated and prudent capital deployment measures.

Shares of Axis Capital, Primerica and Lincoln National have gained 0.2%, 7% and 25% in a year.

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