RLI's Board Okays Special Cash Dividend to Share More Profit
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RLI Corp.’s RLI board of directors approved a special cash dividend of $4.00 per share. This specialty property-casualty insurer has been paying special dividends since 2011. The latest approval marks the 15th straight special dividend.
RLI expects to pay $183 million as a special dividend. Concurrently, the board of directors announced a regular quarterly cash dividend of 29 cents per share. The special and the quarterly dividends will be paid out on Dec. 20 to shareholders of record as of Nov. 29, 2024.
The board also announced a two-for-one stock split. The two-for-one stock split will be distributed out on Jan. 15, 2025, to shareholders of record as of Dec. 31, 2024. Trading of the shares will begin post-split on Jan. 16, 2025. Both the regular and special dividends will be paid on the pre-split shares.
RLI’s Impressive Dividend History
RLI has been paying dividends for 187 consecutive quarters and increased regular dividends in the last 49 straight years. Its dividends witnessed a five-year (2019-2024) CAGR of 8.8%. Based on the stock’s Nov. 7 closing price of $166.34, the new dividend will yield 0.7%, which is better than the industry average of 0.2%.
Financial Strength and Capital Management
This insurer is one of the industry’s most profitable P&C writers, with an impressive track record of delivering 28 consecutive years of underwriting profitability. This insurer stays focused on maintaining long-term industry-leading combined ratios and book value growth. RLI’s diversified product portfolio, strong local branch-office network, focus on specialty insurance lines growth via organic opportunities and acquisitions and financial strength should continue to help boost shareholders’ returns.
The underwriter maintains a solid balance sheet with sufficient liquidity and strong cash flow, helping it meet the interests of its policyholders, enhance operations in the insurance sector and aid growth in its book value for the long term. RLI maintains a conservative underwriting and reserving policy and continues to achieve favorable reserve releases from the prior years. Return on equity, a profitability measure of how efficiently a company utilizes its shareholders' money, was 19.03% in the trailing 12 months, which compared favorably with the industry average of 7.9%.
Zacks Rank and Price Performance
Shares of this Zacks Rank #3 (Hold) property and casualty insurer have gained 25% in the year-to-date period compared with the industry’s return of 30.8%. Superior underwriting discipline and sound capital structure should help shares trend higher. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
