Chubb (CB) to Propose 5.8% Dividend Hike to Share More Profit
Chubb Limited’s CB board of directors announced to propose a 5.8% hike in its dividend. The insurer will now pay, if approved, an annual dividend of $3.64 or 91 cents per share quarterly. The latest hike would mark the 31st straight year of dividend increase.
Based on the closing price of $255.44 as of Feb 22, the company’s dividend yield is 1.4%, much above the industry average of 0.3%. This makes the stock an attractive pick for yield-seeking investors.
This Zacks Rank #2 (Buy) insurer is one of the world’s largest providers of property and casualty insurance and reinsurance. CB is focusing on markets that has immense room for growth and capitalizing on the potential of middle-market businesses, both domestic and international. Thus, the insurer is making investments in various strategic initiatives, both organic and inorganic, that paved the way for long-term growth. Apart from strengthening its traditional core package, Chubb continues to build on specialty products.
Better pricing, business growth and high renewal rates along with these positives, should help it continue its effective capital deployment.
Chubb has a strong capital position with sufficient cash-generation capabilities. Its underwriting and investment performance provide strong support to operating cash flow. Riding on a strong capital position, Chubb also buys back shares apart from paying dividends. The insurer bought back $2.48 billion worth of shares in 2023.
Chubb’s return on equity — a profitability measure of how prudently the company is utilizing its shareholders’ funds — stands at 16.5%, higher than the industry’s average of 7.2%. Its return on equity has been increasing steadily over the last few years.
Shares of Chubb have gained 13.1% year to date compared with the industry’s growth of 15.3%. Its superior underwriting discipline and sound capital structure should help shares trend higher.
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Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited AXS, Mercury General Corporation MCY and The Progressive Corporation PGR , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average surprise being 102.57%. Year to date, the insurer has gained 12%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $10.10 and $11.07, indicating an increase of 2.5% and 9.6% from the year-ago levels, respectively.
Mercury General’s earnings beat estimates in three of the last four quarters and matched in one, the average surprise being 3,417.48%. Year to date, the insurer has rallied 33.9%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $2.90 and $3.90, indicating a rise of 866.67% and 34.48% from the year-earlier levels, respectively.
The Zacks Consensus Estimate for Progressive’s 2024 and 2025 earnings has moved north by 2.6% and 1.1% in the past seven days, respectively. Year to date, PGR has jumped 19%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings is pegged at $8.88 and $10.38, indicating an increase of 45.3% and 17% from the prior-year levels, respectively.
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Chubb Limited (CB) : Free Stock Analysis Report
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