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W.R. Berkley (WRB) Board Gives Nod to Share Buyback Program


The board of directors of W.R. Berkley Corporation WRB recently approved a new share buyback program in order to return more value to its shareholders. The company is now authorized to repurchase 10 million shares.

The recent authorization translates into 8% of the company’s outstanding shares as of Jun 30, 2017.

W.R. Berkley Corp. undertakes share buybacks alongside paying quarterly dividends and special dividends (last quarter the company announced a special dividend of 50 cents per share, amounting to $61 million). Though the company did not buyback shares through the first half of 2017, it has 6.8 million shares remaining under the authorization as of Jun 30, 2017.

W.R. Berkley Corp. has sufficient liquidity, which supports buybacks. A lower share count due to share repurchases also adds to the bottom line. Given its financial strength, we expect more shares to be repurchased going forward.

Concurrently, the board of directors also approved a quarterly dividend of 14 cents per share. The dividend will be paid on Oct 4, 2017 to shareholders of record on Sep 20, 2017. The company’s dividend presently yields 0.82%.

Shares of W.R. Berkley Corp. have underperformed the industry year to date. While W.R. Berkley Corp. shares have gained 3.05%, the industry has registered an increase of 9.47%. Nonetheless, we expect the company’s shareholder-friendly moves to drive the stock higher. Besides buyback and increasing payouts, the company also focuses on increasing its book value, in its efforts to enhance shareholders value. Book value per share rose 4.7% from year-end 2016 to $43.59 as of Jun 30, 2017.

W.R. Berkley Corp carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Several insurers have hiked their dividend or resorted to share buybacks to reward their shareholders. Recently, United Fire Group Inc. (UFCS) increased dividend payout by 12% to 28 cents per share. The Progressive Corporation (PGR) has a 25-million shares repurchase program under its authorization while CNO Financial Group (CNO) has $300 million share buyback program under its authorization.

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