Everest Re Group, Ltd.’s ( RE Quick Quote RE - Free Report) board of directors has approved a 6.4% hike in its quarterly dividend to return more profits to stockholders. The company will now make a quarterly payout of $1.65 per share compared with $1.55 per share paid in November 2019. Shareholders of record as of May 25, 2022 will receive the increased dividend on or before Jun 17, 2022. Based on the closing share price of $273.99 on May 12, the raised payout represents a dividend yield of 2.3%, better than the industry average of nearly 0.4%. Prior to this, the insurer had raised its quarterly dividend by 11% to 1.55 per share in November 2019. Historically, RE boasts a consistent increase in dividends with the metric witnessing a nine-year CAGR (2014-2022) of 9.2%. Everest Re is likely to benefit from its capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities. Everest Re boasts a strong capital position with sufficient cash generation capabilities. The insurer exited the first quarter of 2022 with total investments and cash of $29.3 billion. Driven by a robust capital position and long-term operating performance, the property and casualty (P&C) insurer has been making consistent efforts to improve its long-term shareholder value and focus on sustained growth. Everest Re’s consistent share buyback is also driving the bottom line. RE bought back shares worth $1.3 million in the first quarter of 2022. The recent dividend hike highlights its commitment to prudent capital management. This is a testament to Everest Re’s sustained operational performance over a period of time. Everest Re’s solid financial status provides enough support to engage in shareholder-friendly moves like dividend hikes and share buyback authorization. Return on equity (ROE), a profitability measure of how efficiently a company utilizes its shareholders' money, was 13% in the first quarter of 2022, which compared favorably with the prior-year quarter’s ROE of 4.1%. Shares of this Zacks Rank #2 (Buy) P&C insurer have outperformed the industry in the past year. The stock has gained 2.4% against the industry’s decrease of 3.1%. We expect a robust product portfolio, strategic initiatives, better investment results and a solid capital position to drive shares in the near term. Image Source: Zacks Investment Research
Given the solid capital level of the insurance industry and improving operating backdrop favoring strong operational performance, insurers like
RLI Corp. ( RLI Quick Quote RLI - Free Report) , The Travelers Companies, Inc. ( TRV Quick Quote TRV - Free Report) and Horace Mann Educators Corporation ( HMN Quick Quote HMN - Free Report) have resorted to effective capital deployment to enhance shareholder value. RLI approved a 4% hike in its quarterly dividend to enhance shareholder value in May 2022. RLI has a dividend yield of 0.8%, better than the industry average of nearly 0.4%. The insurer drives long-term sustainable growth for shareholders with the help of its product portfolio, careful selection of niche markets, distribution partners and customers and the strength of its balance sheet, which in turn enables it to hike dividends regularly. The Travelers Companies hiked its dividend by 6% in April 2022. TRV has a dividend yield of 2.1%, better than the industry average of 0.3%. Travelers maintains a conservative balance sheet among its peers. Banking on operational excellence and a solid capital position, the insurer has increased its dividend for the last 11 years. Horace Mann Educators’s board of directors approved a 3.2% hike in its quarterly dividend in March 2022. HMN has a dividend yield of 3.4%, better than the industry average of 2.3%. Its solid financial foundation and operational performance will continue to generate capital, thereby aiding Horace Mann to engage in shareholder-friendly moves apart from investing in business growth through returns that meet or exceed its return on equity targets. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. In the past year, shares of RLI and Travelers have gained 7.4% and 8%, respectively, whereas Horace Mann has lost 5%.