United Fire Rewards Investors With A 10.7% Dividend Hike
Zacks Investment Research | May 17, 2018 11:12PM ET
In its concerted effort to share more profits with shareholders, the board of directors of United Fire Group Inc. (NASDAQ:UFCS) has approved a quarterly dividend hike by 10.7%. The company will now pay a dividend of 31 cents per share, up from 28 cents payable Mar 22, 2018. Shares of the company gained 3.4% in the last couple of trading sessions, reflecting investor confidence in the stock.
Based on the closing price of $52.81 as of May 17, the annualized dividend of $1.24 yields 2.35%, substantially better than the industry average of 0.48%. Shareholders of record as of Jun 1, 2018 will receive the increased dividend amount on Jun15.
United Fire Group boasts an impressive track of paying dividend for the last 200 consecutive quarters. The company has been consistently hiking its dividend since 2014 at a four-year CAGR of 14.6%. With about 25.8 million shares outstanding at the end of the first quarter, the company has to dish out about $7.9 million quarterly or $31.6 million annually as dividend. This payout trend is supported by the company’s sustained solid operational performance to enhance its shareholder value.
United Fire Group flaunts a solid capital deployment policy in place. Apart from raising dividends each year, the company engages in regular share repurchases, lowering the share count and in turn, boosting the bottom line. The company has 2.1 million shares remaining under its share repurchase program, slated to expire in August 2018.
In fact, the insurer is contemplating the approval of an extraordinary special dividend. Pending approval of the Departments of Insurance, the company expects to announce the same in the next three to six months. Shares of the company have rallied 15.96% year to date, outperforming the Zacks Investment Research
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