In a concerted effort to share more profits with shareholders, Assurant, Inc.’s (AIZ - Free Report) board of directors has approved a 7% hike in its quarterly dividend. The company will now pay a quarterly dividend of 60 cents per share compared with 56 cents paid on Sep 18, 2018. Shareholders of record at the close of business on Nov 26 will be rewarded with this meatier dividend on Dec 17, 2018.
Prior to this, the company raised its quarterly dividend by 5.7% to 56 cents per share last August. Historically, it boasts a consistent increase in dividends with the metric witnessing a five-year CAGR (2013-2018) of 11.8%. The increased payout translates into a dividend yield of 2.29%, noticeably better than the industry average of 1.38%.
The company has been increasing its payout each year and the recent dividend hike signifies its commitment toward prudent capital management, reflecting its sustained operational performance over a period of time. Moreover, with The Warranty Group buyout, the company has managed to create a more diversified and predictable earnings flow that will help Assurant boost its cash position and return more value to shareholders.
The company’s solid financial status provides enough support to participate in investor-oriented measures like dividend hikes and share buyback authorization. The company currently has a share repurchase authorization worth $776 million.
Driven by a robust capital position with sufficient liquidity and strong cash flows, Assurant has been consistently making efforts to improve long-term shareholder value and remain focused on sustained profitable growth.
Such steadfast endeavors raise optimism on the stock, making it an attractive pick for yield-seeking investors. We expect the company to indulge in such measures in the near term as well, which will continue to enhance its shareholder value.
Shares of this Zacks Rank #4 (Sell) Multi-line insurer have outperformed the industry year to date. The stock has gained 3.9% against the industry’s decrease of 11.5%. We expect higher revenues, strategic initiatives and a solid capital position to drive the shares higher in the near term.
Stocks to Consider
Some better-ranked stocks from the same space are MGIC Investment Corporation (MTG - Free Report) , Prudential Financial, Inc. (PRU - Free Report) and MetLife, Inc. (MET - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MGIC Investment provides private mortgage insurance and ancillary services to lenders and government-sponsored entities in the United States. The company delivered positive surprises in all the trailing four reported quarters, the average beat being 34.32%.
Prudential Financial provides insurance, investment management and other financial products and services in the United States and internationally. The company pulled off positive surprises in three of the previous four reported quarters, the average beat being 1.13%.
MetLife engages in the insurance, annuities, employee benefits and asset management businesses. The company came up with positive surprises in the preceding four reported quarters, the average earnings surprise being 9.67%.
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