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The Zacks Multiline Insurance industry has performed well so far this year, banking on better pricing, increased exposure, prudent underwriting, streamlined operations, global presence and a solid capital position. The industry has gained 2.5% year to date. Industry players that boast an impressive dividend history have always attracted yield-seeking investors.
Multiline insurers like MetLife Inc. (MET - Free Report) , Prudential Financial Inc. (PRU - Free Report) , MGIC Investment Corporation (MTG - Free Report) , CNO Financial Group (CNO - Free Report) and Old Republic International Corporation (ORI - Free Report) have been investors’ favorites, driven by their solid fundamentals that ensure consistent dividend payments.
Multiline insurers benefit from a diversified portfolio that lowers concentration risk. While higher demand for protection products benefits sales and premiums of life insurance operations, better pricing and increased exposure to intangibles and cyber threats support premium growth of non-life insurance operations. Per the 2024 global insurance outlook published in Financial Services, U.S. demand for catastrophe reinsurance is expected to grow, putting upward pressure on prices.
Also, per Deloitte Insights, the transition to green energy and related insurance products, as well as exposure to intangible assets, offers growth opportunities. Per a report in Carrier Management, AM Best expects profitable commercial lines and improving personal lines in 2024.
Insurers invest a portion of their premium income. Therefore, the higher the rates, the better the investment results. Despite different opinions, the Fed has refrained from cutting rates so far. With a large invested asset base, investment income should remain healthy even if the Fed cuts rates later this year.
Multiline insurers are investing heavily in technology to improve scale and efficiencies. This should help them generate higher margins and improve profitability.
These positives together help insurers build solid policyholders’ surplus that helps the industry absorb losses. A sturdy capital level aids insurers in pursuing strategic mergers and acquisitions, investing in growth initiatives, as well as distributing wealth to shareholders.
Dividend Stocks for Your Portfolio
In this volatile market, stocks that give regular dividends offer an attractive investment opportunity. Regular dividend hikes reflect a company’s confidence in operational strength, which, in turn, fuels earnings power.
With the help of the Zacks Stock Screener, we have selected five multiline insurers that have a Zacks Rank #3 (Hold) each, a dividend yield of more than 2%, as well as a five-year historical dividend growth rate of more than 2%. These stocks have a payout ratio of less than 60, reflecting enough room for future dividend increases. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MetLife, with a market capitalization of $50.2 billion, is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers.
The company has been successfully raising its quarterly dividends. It has a five-year dividend growth rate of 4.1%. Its current dividend of $2.08 yields 3%. The insurer’s payout ratio is 28. (Check MetLife’s dividend history here).
This insurer’s focus on businesses with growth potential and strategies to control costs and increase efficiency bodes well for growth.
Prudential Financial, with a market capitalization of $38.9 billion, is a financial services leader. It offers an array of financial products and services including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services.
The company has been successfully raising its quarterly dividends for 16 years. It has a five-year dividend growth rate of 5.2%. Its current dividend of $5.20 yields 4.8%. The insurer’s payout ratio is 43. (Check Prudential’s dividend history here).
Prudential continues to benefit from its solid asset-based businesses, improved margins in the Group Insurance business and international operations. A high-performing asset management business and deeper reach in the pension risk transfer market are catalysts for long-term growth. Prudential envisions about 65% free cash flow ratio of earnings and about two times its dividend. It is on track to become a higher growth, less market-sensitive business
MGIC Investment, with a market capitalization of $5.3 billion, is the largest private mortgage insurer in the United States. The insurer’s payout ratio is 18, with a five-year dividend growth rate of 19.5%. Its annual dividend of 46 cents currently yields 2.4%. (Check MGIC Investment’s dividend history here)
Higher insurance in force, resulting from an increase in new business written, higher annual persistency, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and prudent capital deployment, bode well for growth and should ensure continued dividend payouts.
CNO Financial, with a market capitalization of $1.7 billion, is a top-tier holding company for a group of insurance companies operating throughout the United States. It develops, administers, and markets supplemental health insurance, annuity, individual life insurance and other insurance products.
CNO Financial has been raising its quarterly dividend since 2013. Its current dividend yield is 2.4%. The insurer’s payout ratio is 19, with a five-year dividend growth rate of 7.7%. (Check CNO Financial’s dividend history here)
Improved premiums, driven by a well-diversified product portfolio comprising health insurance, annuity, individual life insurance and other insurance products, acquisitions and partnerships, technology upgrades and a sound financial position, poise it well for growth.
Old Republic International, with a market capitalization of $8 billion, engages in the insurance underwriting and related services business, primarily in the United States and Canada.
ORI has an impressive dividend history, banking on a solid capital position. This third-largest title insurer in the country increased dividends for 43 straight years and paid out dividends for the last 83 years, besides paying special dividends occasionally. Its dividend yield of 3.7% betters the industry average of 2.3%. Old Republic is one of the 111 companies with at least 28 consecutive years of annual dividend growth. The insurer’s payout ratio is 37, with a five-year dividend growth rate of 5.4%. (Check Old Republic International’s dividend history here)
Old Republic International Corporation Dividend Yield (TTM)
ORI’s solid market presence, niche focus, low property catastrophe exposure in its General Insurance segment and robust capital position bode well for growth. ORI continues to strengthen its balance sheet by improving its cash balance while lowering its leverage ratio.
Unique Zacks Analysis of Your Chosen Ticker
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5 Dividend-Paying Multiline Insurers Worth Watching
The Zacks Multiline Insurance industry has performed well so far this year, banking on better pricing, increased exposure, prudent underwriting, streamlined operations, global presence and a solid capital position. The industry has gained 2.5% year to date. Industry players that boast an impressive dividend history have always attracted yield-seeking investors.
Multiline insurers like MetLife Inc. (MET - Free Report) , Prudential Financial Inc. (PRU - Free Report) , MGIC Investment Corporation (MTG - Free Report) , CNO Financial Group (CNO - Free Report) and Old Republic International Corporation (ORI - Free Report) have been investors’ favorites, driven by their solid fundamentals that ensure consistent dividend payments.
Multiline insurers benefit from a diversified portfolio that lowers concentration risk. While higher demand for protection products benefits sales and premiums of life insurance operations, better pricing and increased exposure to intangibles and cyber threats support premium growth of non-life insurance operations. Per the 2024 global insurance outlook published in Financial Services, U.S. demand for catastrophe reinsurance is expected to grow, putting upward pressure on prices.
Also, per Deloitte Insights, the transition to green energy and related insurance products, as well as exposure to intangible assets, offers growth opportunities. Per a report in Carrier Management, AM Best expects profitable commercial lines and improving personal lines in 2024.
Insurers invest a portion of their premium income. Therefore, the higher the rates, the better the investment results. Despite different opinions, the Fed has refrained from cutting rates so far. With a large invested asset base, investment income should remain healthy even if the Fed cuts rates later this year.
Multiline insurers are investing heavily in technology to improve scale and efficiencies. This should help them generate higher margins and improve profitability.
These positives together help insurers build solid policyholders’ surplus that helps the industry absorb losses. A sturdy capital level aids insurers in pursuing strategic mergers and acquisitions, investing in growth initiatives, as well as distributing wealth to shareholders.
Dividend Stocks for Your Portfolio
In this volatile market, stocks that give regular dividends offer an attractive investment opportunity. Regular dividend hikes reflect a company’s confidence in operational strength, which, in turn, fuels earnings power.
With the help of the Zacks Stock Screener, we have selected five multiline insurers that have a Zacks Rank #3 (Hold) each, a dividend yield of more than 2%, as well as a five-year historical dividend growth rate of more than 2%. These stocks have a payout ratio of less than 60, reflecting enough room for future dividend increases. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MetLife, with a market capitalization of $50.2 billion, is an insurance-based global financial services company providing protection and investment products to a range of individual and institutional customers.
The company has been successfully raising its quarterly dividends. It has a five-year dividend growth rate of 4.1%. Its current dividend of $2.08 yields 3%. The insurer’s payout ratio is 28. (Check MetLife’s dividend history here).
MetLife, Inc. Dividend Yield (TTM)
MetLife, Inc. dividend-yield-ttm | MetLife, Inc. Quote
This insurer’s focus on businesses with growth potential and strategies to control costs and increase efficiency bodes well for growth.
Prudential Financial, with a market capitalization of $38.9 billion, is a financial services leader. It offers an array of financial products and services including life insurance, annuities, retirement-related services, mutual funds, investment management and real estate services.
The company has been successfully raising its quarterly dividends for 16 years. It has a five-year dividend growth rate of 5.2%. Its current dividend of $5.20 yields 4.8%. The insurer’s payout ratio is 43. (Check Prudential’s dividend history here).
Prudential Financial, Inc. Dividend Yield (TTM)
Prudential Financial, Inc. dividend-yield-ttm | Prudential Financial, Inc. Quote
Prudential continues to benefit from its solid asset-based businesses, improved margins in the Group Insurance business and international operations. A high-performing asset management business and deeper reach in the pension risk transfer market are catalysts for long-term growth. Prudential envisions about 65% free cash flow ratio of earnings and about two times its dividend. It is on track to become a higher growth, less market-sensitive business
MGIC Investment, with a market capitalization of $5.3 billion, is the largest private mortgage insurer in the United States. The insurer’s payout ratio is 18, with a five-year dividend growth rate of 19.5%. Its annual dividend of 46 cents currently yields 2.4%. (Check MGIC Investment’s dividend history here)
MGIC Investment Corporation Dividend Yield (TTM)
MGIC Investment Corporation dividend-yield-ttm | MGIC Investment Corporation Quote
Higher insurance in force, resulting from an increase in new business written, higher annual persistency, a decline in loss and claims payments, lower delinquency, better housing market fundamentals and prudent capital deployment, bode well for growth and should ensure continued dividend payouts.
CNO Financial, with a market capitalization of $1.7 billion, is a top-tier holding company for a group of insurance companies operating throughout the United States. It develops, administers, and markets supplemental health insurance, annuity, individual life insurance and other insurance products.
CNO Financial has been raising its quarterly dividend since 2013. Its current dividend yield is 2.4%. The insurer’s payout ratio is 19, with a five-year dividend growth rate of 7.7%. (Check CNO Financial’s dividend history here)
CNO Financial Group, Inc. Dividend Yield (TTM)
CNO Financial Group, Inc. dividend-yield-ttm | CNO Financial Group, Inc. Quote
Improved premiums, driven by a well-diversified product portfolio comprising health insurance, annuity, individual life insurance and other insurance products, acquisitions and partnerships, technology upgrades and a sound financial position, poise it well for growth.
Old Republic International, with a market capitalization of $8 billion, engages in the insurance underwriting and related services business, primarily in the United States and Canada.
ORI has an impressive dividend history, banking on a solid capital position. This third-largest title insurer in the country increased dividends for 43 straight years and paid out dividends for the last 83 years, besides paying special dividends occasionally. Its dividend yield of 3.7% betters the industry average of 2.3%. Old Republic is one of the 111 companies with at least 28 consecutive years of annual dividend growth. The insurer’s payout ratio is 37, with a five-year dividend growth rate of 5.4%. (Check Old Republic International’s dividend history here)
Old Republic International Corporation Dividend Yield (TTM)
Old Republic International Corporation dividend-yield-ttm | Old Republic International Corporation Quote
ORI’s solid market presence, niche focus, low property catastrophe exposure in its General Insurance segment and robust capital position bode well for growth. ORI continues to strengthen its balance sheet by improving its cash balance while lowering its leverage ratio.