The board of directors of The Navigators Group, Inc. approved a quarterly cash dividend of 9 cents to be paid to common stockholders. This is the first dividend to be paid by the company in its thirty years of being listed on NASDAQ.  The marine insurance company will now reward investors with a quarterly dividend of 13 cents which translates to an annual dividend of 52 cents per share.

Shareholders on record as of Jun 15 will receive the higher dividend on Jul 5, 2016.

The dividend initiation reflects the company’s confidence in the health of its business and optimism about long-term growth prospects. The dividend payout is supported by the company’s strong balance sheet and displays its commitment to share more with its investors. The dividend translates an annual dividend yield of 0.4% based on the company’s stock price of $89.61 on May 26. It is to yet to be seen if the stock gains post the dividend announcement.

Navigators had 14.5 million shares outstanding as of Mar 31, 2016. Based on outstanding shares, the company will have to pay $1.3 million quarterly or $5.2 million annually as dividends. The company’s financial profile is strong enough to support the payout. The insurer’s commencement of dividend payout should make it an attractive pick for yield seeking investors. Also, following the news of initiation of dividend we expect analysts to pull their estimates up exerting upward pressure on the Zacks Rank. The insurer current has a Zacks Rank #4 (Sell).

Several insurance companies have recently announced dividend hikes. W.R. Berkley Corporation (WRB Quick QuoteWRB - Free Report) announced a dividend hike of 8%, while Marsh & McLennan Companies, Inc.(MMC Quick QuoteMMC - Free Report) raised its dividend payout by 9.7%. Unum Group (UNM Quick QuoteUNM - Free Report) also hiked its dividends by 8%.

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