RenaissanceRe Hikes Quarterly Dividend


The board of directors of RenaissanceRe Holdings Ltd. (RNR) approved a 3.6% increase in its quarterly cash dividend. The property and casualty insurer will now pay a dividend of 29 cents per share against 28 cents distributed previously. The first increased dividend will be paid on Mar 31, 2014 to shareholders of record as of Mar 14.

The increased quarterly dividend is equivalent to an annual dividend of $1.16 per share. Based on yesterday’s closing share price of $94.99, the increased dividend implies a yield of 1.22%.

RenaissanceRe’s sturdy financial position, supported by a strong cash balance and retained earnings, cushion its robust capital deployment activity. The company had cash and cash equivalents of $408 million as of the end of fourth-quarter 2013, up 34.2% year over year. Moreover, RenaissanceRe’s retained earnings were $3.46 billion as of Dec 31, 2013, reflecting a 13.6% increase from 2012 end.

Based on nearly 44.1 million shares outstanding as of 2013 end, RenaissanceRe will have to dish out nearly $12.8 million for the quarterly dividend payout.

Besides delivering dividends consistently, RenaissanceRe is also garnering investors’ confidence through its share repurchase activities. The company increased its current share repurchase authorization, which brings it to $500 million. During the fourth quarter, RenaissanceRe repurchased 0.73 million shares for $66.9 million. Moreover, from Jan 1 to Feb 3, the company repurchased 0.99 million shares for $89.3 million.  

The board of another property and casualty insurer, AmTrust Financial Services, Inc. (AFSI) hiked its regular quarterly dividend by 43% on Feb 18, 2014. The company will now be paying quarterly dividends of 20 cents per share, up from 14 cents a share paid previously. The newly raised dividend will be paid on Apr 14, 2014.

RenaissanceRe presently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Greenlight Capital Re, Ltd. (GLRE) and Navigators Group Inc. (NAVG). Both these stocks carry a Zacks Rank #1 (Strong Buy).

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