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OneBeacon Insurance Group, Ltd. Message Board

  • snogreen snogreen May 30, 2012 8:00 PM Flag

    6.7% yield

    Wow, I didn't like OB at $16 and change in Feb, but I have to say I like OB at $12.74 now. The yield today at $12.74 is 6.7%. The yeild on a 10 year tresury is 1.63%. And the Treasury is working up to $15 trillion in debt. OB has more cash on the balance sheet than debt.

    I think the OB dividend is safe. I hope they do NOT challenge the good balance sheet by doing a special dividend. What will support OB down here is if market believes the 6.7% dividend is safe. If WTM sucks out and drains another large special dividend, then the confidence could wane of safety the 6.7% regular dividend.

    OB goes ex dividend around June 15 a couple weeks from now. So that would drop it to about $12.53. That would put OB at 1.05 times book. With a solid balance sheet and an attractive specialty lines business. Basically? CHEAP! Not to say OB can't drift down. You cannot fight a panicked market on the Euro collapsing. But with a 6.7% dividend versus 1.63% for 10 year treasuries? OB wins. I'll sleep okay buying more here.even if it goes lower.

 
OB
14.07-0.38(-2.63%)Sep 1 4:01 PMEDT