The Hanover Insurance Rewards Investors With Dividend Hike
Zacks Investment Research | Dec 06, 2016 09:38PM ET
The board of directors of The Hanover Insurance Group, Inc. (NYSE:THG) recently approved a 9% hike in its quarterly dividend. The company will now reward its shareholders with a dividend of 50 cents per share as against 46 cents paid on Sep 30, 2016.
Based on the closing share price of $89.23 as of Dec 6, the increased dividend translates to a yield of 2.10%. The dividend will be paid on Dec 30, 2016.
The property and casualty (P&C) insurer remains committed to enhancing shareholder value. In fact, the board of directors is confident about the company’s financial condition and growth trajectory. The dividend hike is indicative of the bullish sentiment and should further strengthen the company’s position, leading to success in both the near and long term.
The Hanover Insurance has been consistently increasing its dividend. The recent hike marks the twelve straight year of dividend increase by the company. The P&C insurer’s regular quarterly dividend has grown at a five-year CAGR (2010–2015) of 11.1%. The increases in dividends are primarily backed by The Hanover Insurance’s sturdy liquidity position.
In addition, the company’s dividend payout ratio is 32.45%, which is much better than the industry dividend payout ratio of 26.76%. Moreover, the P&C insurer’s efficient capital deployment through dividend payouts and share buybacks makes it an attractive pick for yield-seeking investors.
Shares of The Hanover Insurance have surpassed the Zacks categorized P&C industry, since its earnings release. The P&C insurer’s stock gained 18% compared with 10.1% growth witnessed by the industry. Strong growth both in the bottom line and top line, solid premium improvement and decreased losses and expenses, mainly contributed to the outperformance. Also, a robust liquidity position backed by strong cash flow generation has helped the company to invest in strategic initiatives, which in turn, has accelerated its growth. The Hanover Insurance currently carries Zacks Rank #2 (Buy). You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.