Continuing with the endeavor to enhance its shareholders value, the Board of Directors of HCC Insurance Holdings Inc. (HCC - Free Report) , approved a share buyback program. Per the approval, the company is authorized to repurchase shares worth $300 million.
Following the announcement, the share prices of the company increased upwards. It is likely that continuous efforts on the company’s part to boost shareholders' value and reinstated investor confidence helped the share price move upwards. The share price ascended 0.5% to close at $32.52 as on Monday.
The current approval replaces the existing $300 million share buyback program approved on August 25, 2011. Under the previous authorization, the remaining $98.0 million will no longer be utilized.
The company stated that it considers repurchasing shares as a prudent capital management strategy. We believe the new authorization coupled with recent dividend hike also emphasizes on the inherent strength of its liquidity.
HCC Insurance Holdings aggressively buys back shares. The company spent $59.5 million to buyback 1.9 million shares in the second quarter.
W.R. Berkley Corp. (WRB - Free Report) , which closely competes with HCC Insurance Holdings, recently announced that its Board has increased its share repurchase authorization to 10 million shares.
Besides buying back shares, HCC Insurance Holdings also hikes dividend every year to return more value to the shareholders. Recently, the Board approved a 6.5% increase in its quarterly cash dividend, marking the 16th consecutive year of dividend rise for the company. Also, it is the 66th consecutive quarter in which the company is paying a cash dividend.
The increased dividend of 16.5 cents per share will be paid on October 15, 2012, to shareholders of record as of October 1. The dividend yield of the company is 2.04%, relatively better than the industry yield of 1.68% and of W.R. Berkley with a yield of 0.96%
The quantitative Zacks Rank for HCC Insurance Holdings is currently “2”, indicating slight upward boost on the shares over the near term.