RenaissanceRe Raises Dividend to Boost Investors' Worth - Analyst Blog
In order to boost shareholder value, RenaissanceRe Holdings Ltd. (RNR) increased its quarterly dividend by approximately 3.5%. This translates into a quarterly cash dividend of 30 cents per share, up from 29 cents paid on Dec 31, 2014. The raised dividend will be paid on Mar 31, 2015, to shareholders on record as of Mar 13, 2015.
Based on the closing share price of $102.30 as of Feb 19, 2015, the increased dividend implies a yield of 1.2%. RenaissanceRe’s current dividend yield is better than that of some other property and casualty insurers – Federated National Holding Company (FNHC) with a yield of 0.53%, National General Holdings Corp. (NGHC) with 0.44% and United Insurance Holdings Corp. (UIHC) with 0.79%.
RenaissanceRe has a history of raising dividends. The company has been increasing its quarterly dividends consistently over the last 20 years. Earlier, the company had hiked its dividend by 3.6%, in Feb 2014.
The dividend hike also reflects the financial strength of the company. RenaissanceRe will require $12 million every quarter for the dividend payment, based on the outstanding share count of 40 million as of Dec 31, 2014. The company has ample liquidity for the payment, with total cash and cash equivalents of $525.6 million as of Dec 31, 2014.
RenaissanceRe has always been active in taking up strategic initiatives to gain investor confidence, be it through share repurchases or dividend hikes. We believe that the dividend hike should boost investor confidence and thus help in stock price appreciation.
RenaissanceRe currently carries a Zacks Rank #3 (Hold).
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RENAISSANCERE (RNR): Free Stock Analysis Report
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