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Chubb to Propose 4% Dividend Hike, Boost Shareholder Value

Zacks Equity Research

The board of directors of Chubb Limited CB is set to propose a 4% increase in annual dividend at the company’s annual general meeting. This hike, if approved, will mark the 27th consecutive dividend increase by the company.

On approval of the same, Chubb will pay out a quarterly dividend of 78 cents ($3.12 on an annualized basis) compared with the current dividend of 75 cents ($3 on an annualized basis), which will be paid out on Apr 10, 2020 to shareholders of record as of Mar 20.


Prior to this, in May 2019, it hiked annual dividend by 2.5%, which marked the 26th straight year of dividend hike.

Chubb has a stellar track record of paying quarterly dividends and raising its dividend payout each year. Chubb has more than doubled its quarterly dividend since 2010, reflecting sustained solid operational performance.

Based on the closing price of $150.11 as of Feb 27, the company’s dividend yield is 2%, much above the industry average of 0.4%. Notably, the company has consistently hiked its dividend with the metric witnessing a five-year CAGR (2014-2019) of 8.45%.

Apart from continuous dividend increases, Chubb aggressively buys back shares to boost its bottom line. In 2019, the company returned $2.9 billion to shareholders, including $1.4 billion in dividend and over $1.5 billion in share repurchases

Shares of this Zacks Rank #3 (Hold) property and casualty insurer have outperformed the industry in the past year. The stock has gained 12.1% compared with the industry’s growth of 7.2%. The company’s expanded capabilities, strategic growth initiatives and effective capital deployment should help the stock sustain momentum.

Stocks to Consider

Some better-ranked property and casualty insurers include Cincinnati Financial Corp. CINF, Fidelity National Financial, Inc, FNF and Axis Capital Holdings Limited AXS each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cincinnati Financial and Fidelity National Financial surpassed estimates in each of the last four quarters, with the average positive surprise being 17.86% and 14.83%, respectively.

Axis Capital Holdings surpassed estimates in two of the last four quarters, with the average positive surprise being 53.46%.

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Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
 
Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
 
Chubb Limited (CB) : Free Stock Analysis Report
 
Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report
 
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