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Brown & Brown Rewards Shareholders With 6.7% Dividend Hike

Zacks

In a concerted effort to share more profits with shareholders, Brown & Brown, Inc.’s BRO board of directors has approved a hike of 6.7% in its quarterly dividend. The company will now pay a quarterly dividend of 8 cents per share compared with 7.5 cents paid on Aug 15, 2018. Shareholders of record as of Oct 26 will be rewarded with this heavier dividend on Nov 7, 2018.

Prior to this, the company raised quarterly dividend by 11.1% to 15 cents per share in October 2017. Historically, the company boasts a diligent increase in dividends with the metric witnessing a five-year CAGR (2013-2018) of 10.8%. The increased payout translates into a dividend yield of 1.02%.

The company has been increasing its payout each year and the recent dividend hike represents the company’s 25th consecutive yearly increase, reflecting its sustained operational performance over a period of time. The maximum dividend payout expected to be made in 2018 without prior approval is $4.8 million.

The company’s solid financial status provides enough support to participate in investor-oriented measures like dividend hikes and share buyback authorization. The company currently has a share repurchase authorization worth $227.5 million.

Driven by a robust capital position with sufficient liquidity and strong cash flows, Brown & Brown has been consistently making efforts to improve long-term shareholder value and remain focused on sustained profitable growth.

Such steadfast endeavors raise optimism on the stock, making it an attractive pick for yield-seeking investors. We expect the company to indulge in such measures in the near term as well, which will continue to enhance the shareholder value.

Shares of this Zacks Rank #3 (Hold) insurance broker have outperformed the industry, year to date. The stock has rallied 11.3% compared with the industry’s increase of 3.8%. We expect higher commissions and fees, strategic initiatives and a solid capital position to drive the shares higher in the near term.



Stocks to Consider

Some better-ranked stocks from the insurance industry are Markel Corporation MKL, Kingstone Companies, Inc. KINS and Athene Holding Ltd. ATH, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Markel markets and underwrites specialty insurance products in the United States, the U.K., Canada and internationally. The company delivered positive surprises in two of the trailing four quarters with an average beat of 34.72%.

Kingstone Companies underwrites property and casualty insurance products to small businesses and individuals in New York. The company pulled off positive surprises in two of the previous four quarters with an average positive surprise of 0.17%.

Athene Holding issues, reinsures and acquires retirement savings products in the United States, the District of Columbia, and Germany. The company came up with positive surprises in the preceding four quarters with an average earnings surprise of 15.03%.

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