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RLI Corp. Boosts Shareholder Value, Hikes Dividend by 4.3%

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The board of directors of RLI Corp.  (RLI - Free Report) recently approved a hike in its quarterly dividend to enhance shareholder value. The company will now pay out a dividend of 24 cents per share compared with 23 cents paid on Jun 20, 2019, which reflects an increase of 4.3%.

Shareholders of record as of May 29, 2020 will receive the increased dividend on Jun 19, 2020. Based on the annualized dividend of 96 cents and the closing share price of $70.28 on May 6, the raised payout represents a dividend yield of 1.4%, better than the industry average of nearly 0.5%. Prior to this, the company had raised quarterly dividend by 4.5% to 23 cents per share last May.

Notably, RLI Corp. has been consistently hiking its dividend with the metric witnessing a five-year CAGR (2014-2019) of 48.6%. The company has been paying dividends for 170 consecutive quarters and increased regular dividends in the last 44 straight years, reflecting its commitment toward prudent capital management.

The recent hike marks the 45th consecutive dividend increase by the company.  Further, the insurer has also been paying special dividends to its shareholders for the last few years. As a result of strong underwriting and financial performance in 2019, the company paid out a special cash dividend of $1.00 per share in November 2019. In the last five years, the company paid out total dividend of $527 million.

The company drives long-term sustainable growth for shareholders with the help of product portfolio, careful selection of niche markets, distribution partners and customers and the strength of their balance sheet, which in turn enable it to hike regular dividends.

Shares of this Zacks Rank #3 (Hold) P&C insurer have outperformed the industry in the past year. The stock has lost 11.9% compared with the industry’s decline of 16.1%. We expect improvement in the top line and a solid capital position to drive shares in the near term.

Stocks That Warrant a Look

Some better-ranked stocks from the same space are The Allstate Corporation (ALL - Free Report) , The Progressive Corporation (PGR - Free Report) and Palomar Holdings Inc. (PLMR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Allstate surpassed estimates in each of the last four quarters, with the average positive surprise being 18.45%.

Progressive surpassed estimates in three of the last four quarters, with the average positive surprise being 15.58%.

Palomar surpassed estimates in two of the last four quarters, with the average positive surprise being 10.93%.

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