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Assured Guaranty to Diversify Business, Raises Dividend

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Assured Guaranty Ltd. (AGO - Free Report) announced that its subsidiary Assured Guaranty US Holdings Inc. has acquired a minority interest in Cadia (Malta) Limited. The acquisition is in sync with the company’s strategy to invest in alternative investments.

Cadia (Malta) Limited is the holding company of Rubicon Infrastructure Advisors (Rubicon), an investment banking firm in the global infrastructure sector. The acquirer has invested in Rubicon to back its global expansion.

Assured Guaranty is focusing to diversify its revenue stream. The company is strategically choosing to pump its resources into various businesses other than its core financial guaranty business with similar risk profiles but yielding superior returns.  This in turn is likely to help lower the company’s excess capital. Last year, the company purchased a limited partnership in a fund. Assured Guaranty also acquired a minority stake in investment advisory, Wasmer, Schroeder & Company.

In a separate development, last week, the board of directors of Assured Guaranty approved a 12% increase in dividend to 16 cents per share in its endeavor to enhance shareholders’ value. The company has an impressive track record of paying quarterly dividends and raising the same for seven straight years. The company has grown its dividend by nearly 256% from 4.50 cents paid in November 2011. Notably, the company has tripled its quarterly payout since it went public in 2004.

Shareholders of record as of Mar 7, 2018 will receive the hiked dividend on Mar 21. The annualized dividend of 64 cents yields 1.8%, based on the closing price of $34.68 as of Feb 27.

Recently, the board of Chubb Limited (CB - Free Report) announced its intention to propose a 2.8% increase in annual dividend while Willis Towers Watson Public Limited Company’s board members have hiked the company’s quarterly dividend by 13%. Also, Manulife Financial Corporation (MFC - Free Report) approved a 7% raise in quarterly dividend.

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