RenaissanceRe Shares More Profit - Analyst Blog
February 23 2012 - 12:16PM
Zacks
In its concerted effort to share more profits with investors,
the board of directors of RenaissanceRe Holdings
Ltd. (RNR) authorized a 3.8% increase in its quarterly
dividend.
The company will now pay a dividend of 27 cents per share, up
from 26 cents paid on December, 2011. The shareholders of record
March 15, 2012 will receive the increased dividend on March 30,
2012.
The recent dividend hike marks the company’s seventeenth
consecutive annual increase.
Also, the company’s board authorized an increase in its share
buyback program, thereby bringing the total authorization to $500
million. During 2011, the company spent $191.6 million to buy back
2.9 million shares.
The dividend hike and share buybacks will primarily be supported
by the company’s strong balance sheet and its ability to generate
healthy cash flow.
Despite these announcements there was no increase in the share
price. It is possible that the stock had factored in the
expectation of the dividend increase. Over a decade, the board, has
been increasing dividend by only one cent. The share price of
RenaissanceRe declined 1.3% to close at $72.54 as on
Wednesday.
Also, there was no earnings momentum over the last 7 days.
However, the news might encourage analysts to pull up their
estimates in the coming days.
The Zacks Consensus Estimate for first-quarter 2012 is currently
$2.24 per share. For full years 2012 and 2013, the Zacks Consensus
Estimates are, respectively, $8.30 and $9.35 per share.
We retain our long-term Neutral recommendation on RenaissanceRe
Holdings given an improving operating leverage due to strategic
divestitures and stable ratings.
However, the company historically faces significant challenges
due to weather-related events and high competition in the
catastrophe insurance and reinsurance segments.
The quantitative Zacks #3 Rank (short term Hold rating) on the
stock indicates no clear directional pressure on the shares over
the near term.
Based in Hamilton, Bermuda, RenaissanceRe Holdings Ltd.
primarily provides property-catastrophe reinsurance to insurers and
reinsurers globally on the basis of excess of loss; coverage of
losses over a specified limit is termed as excess of loss. The
company competes with XL Group plc (XL),
Ace Limited (ACE) and PartnerRe
Ltd. (PRE).
ACE LIMITED (ACE): Free Stock Analysis Report
PARTNERRE LTD (PRE): Free Stock Analysis Report
RENAISSANCERE (RNR): Free Stock Analysis Report
XL GROUP PLC (XL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
XL Fleet (NYSE:XL)
Historical Stock Chart
From May 2024 to Jun 2024
XL Fleet (NYSE:XL)
Historical Stock Chart
From Jun 2023 to Jun 2024