Chubb Hits 52-Week High On Rating Action, Dividend Hike

On Jun 30, 2016, Chubb Limited (NYSE:CB) reached a 52-week high of $130.77. The upside in the stock was most likely driven by favorable rating assessment from the rating agency A.M.Best and the recent dividend hike by the company.

Investors’ confidence in the stock has been cemented as A.M. Best reiterated the financial strength rating of A++ (Superior) of most subsidiaries of the company. The rating agency also removed the subsidiaries from under review with negative implications.

Investors are highly optimistic on Chubb after it was acquired by ACE Limited. This led to the formation of a global leader in commercial and personal property and casualty insurance, with an exceptionally balanced product portfolio, a broad and deep global presence, extensive distribution channel capabilities, and the ability to serve a diverse array of commercial and personal customers.

Chubb also remains a favorite among investors because of its impressive track of raising dividend each year. Moreover, the company has been paying dividend each quarter since it became a public company in 1993. In May, the company increased its quarterly dividend by 3%. The latest increase marked the twenty-third straight year of dividend hike. The company has raised its dividend by about 47% over the last five years, with its yield outperforming the sector average. Chubb intends to pay around 30% of its operating earnings to its shareholders.

Chubb’s prudent enterprise risk management, disciplined underwriting, global franchise recognition, sturdy risk-adjusted capitalization, sustained underwriting profitability and seasoned management team also attract investors.

Chubb carries a Zacks Rank #3 (Hold). Some better-ranked property and casualty insurers are OneBeacon Insurance Group, Ltd. (NYSE:OB) , Markel Corp. (NYSE:MKL) and National General Holdings Corp. (NASDAQ:NGHC) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).