ACE Limited (ACE) hiked its quarterly dividend by 3% to 65 cents per share. The annualized dividend of $2.60 per share yields 2.5% based on the closing price of $102.29 on May 15, 2014.
The latest increase, announced at the company’s extraordinary general meeting, comes within four months since the board declared its previous quarterly dividend hike of 24%.
ACE Limited has an impressive track of raising dividend each year and has been paying quarterly dividends each quarter since it became a public company in 1993. This Zacks Rank #2 (Buy) property and casualty insurer has raised its dividend by about 150% over the last 5 years, with its yield outperforming the sector average of 2.09%.
The company intends to pay out around 30% of its operating earnings to its shareholders.
The increased dividend will be paid on Aug 13, 2014 to shareholders of record on Jul 23.
A sturdy financial position backed by continued solid operational performance positions it well for increased payouts.
Shares of ACE Limited have gained almost 1.9% year to date riding on the strength of strong operating results which have been helping it to outperform expectation over several quarters.
The stock is witnessing continued upward movement in its estimates. And with continued endeavors that ultimately enhance shareholders value, we expect the momentum to continue. The Zacks Consensus Estimate of $8.94 and 9.23 respectively for 2014 and 2015 reflect increases of 2.3% and 1.2% in the last 30 days.
Several insurers are treading the same path as ACE Limited and announcing dividend increases. These insurers foresee the hikes as strategies to retain investor confidence as well as attract new investors. Recently, the board of directors of The Travelers Companies Inc. (TRV) increased the company’s dividend by 10% to 55 cents per share. The board of directors of RLI Corp. (RLI) announced a 5 .9% hike in the company’s quarterly dividend to 18 cents per share. Furthermore, the board of directors of Assurant Inc. (AIZ) approved an 8% increase in the quarterly cash dividend to 27 cents per share.