The board of directors of W.R. Berkley Corporation WRB approved a special cash dividend of 50 cents per share. This Zacks Rank #3 (Hold) specialty property-casualty insurer has been paying special dividends since 2012. The latest approval marks the 15th straight special dividend.
Shareholders at the close of business on Jan 13, 2023, will receive the special dividend on Jan 24, 2023.
W.R. Berkley maintains a solid balance sheet with sufficient liquidity and strong cash flows. Banking on its stable cash flow, W.R. Berkley has raised dividends 17 times since 2005. Its current dividend yield of 0.7% is better than the industry average of 0.4%, which makes WRB stock an attractive pick for yield-seeking investors.
A solid capital position also helps the insurer engage in share buybacks. WRB, one of the nation’s largest commercial lines property casualty insurance providers, ensures effective capital deployment to enhance shareholders’ value. Such initiatives not only reflect the operational and financial strength of the insurer. Return on equity, a profitability measure of how efficiently a company utilizes its shareholders' money, expanded 400 basis points (bps) to 18.1% in the first nine months of 2022. WRB targets a return on equity of 15% over a long term
The strength of rate increases, expansion of international business, reserving discipline, solid balance sheet and prudent capital management policy should help WRB maintain the streak of hiking dividends and paying special dividends.
Shares of WRB have gained 33.5% in a year, outperforming the industry’s 2.2% increase. Solid insurance business, strong international business and sturdy financial position continue to drive shares.
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Stocks to Consider
Some better-ranked stocks from the insurance industry are Allianz SE ALIZY, MGIC Investment Corporation MTG and Kinsale Capital Group, Inc. (KNSL), each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Allianz’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 12.96%. In the past six months, the insurer has gained 12.2%.
The Zacks Consensus Estimate for ALIZY’s 2023 earnings has moved 0.8% north in the past 30 days. The Zacks Consensus Estimate for Allianz’s 2023 earnings per share indicates year-over-year increases of 47.2%.
MGIC Investment’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 36.34%. In the past six months, MTG stock has gained 1.5%.
The Zacks Consensus Estimate for MTG’s 2023 earnings has moved 0.4% north in the past 30 days.
Kinsale Capital’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 15.16%. In the past six months, KNSL has gained 10.7%.
The Zacks Consensus Estimate for KNSL’s 2023 earnings indicates a respective year-over-year rise of 22.4%.
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