In a bid to return more value to shareholders, the board of directors of Old Republic International (ORI - Free Report) recently approved a special dividend of $1 per share. Shares of the company gained 1.2% in the last couple of trading sessions, reflecting investors’ optimism on the stock.
The Zacks Rank #3 (Hold) insurer had paid out a special dividend of $1 per share last year too. The company has decided to return excess capital to its shareholders and thus approved the recent special dividend. Based on 300.6 million shares at the end of the second quarter of 2019, the company will pay out $300.6 million as special dividend. Sustained solid operational result helps the company engage in shareholder friendly moves.
Concurrently, the company also announced quarterly dividend of 20 cents per share. The company has been increasing dividends each year. Its dividend has grown about 8.1% over the last five years. Also, its dividend yield of 3.5% betters the industry average of 2.4%, thus making it an attractive pick for yield-seeking investors. Also, its return on equity, a profitability measure of how efficiently the company is utilizing its shareholders money, is 10.2%, higher than the industry average of 7.9%.
Both the quarterly dividend and special dividend will be paid on Sep 16, 2019 to shareholders of record as on Sep 6.
Shares of Old Republic have rallied 10.3% year to date, outperforming the industry’s increase of 1.6%. The company’s continued focus to expand the General Insurance Group, maintaining bottom line underwriting profitability and solid Title Insurance business, should help the stock retain momentum.
Given insurance industry’s solid capital position and operational strength, insurers have been engaging in booting shareholders value. Recently, the board of directors of American Financial Group (AFG - Free Report) approved a 12.5% hike in its annual dividend while the board of directors of Radian Group (RDN - Free Report) approved a new $200 million share buyback authorization.
A Stock to Consider
A better-ranked stock from the insurance industry is James River Group Holdings (JRVR - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
James River Group provides specialty insurance and reinsurance services in the United States. The company delivered a positive surprise of 3.13% in the last reported quarter.
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