CB Raises Dividend, Okays Buyback: Is the Stock a Buy Now?

Core Viewpoint - Chubb Limited has approved a 6.6% increase in its dividend, making it an attractive option for yield-seeking investors due to its higher dividend yield compared to the industry average [1][3] Dividend and Share Repurchase - The new dividend will be $3.88 per share, payable on July 3, 2025, to shareholders of record as of June 30, 2025 [1] - A new $5 billion share repurchase program has been authorized, effective July 1, 2025, while the existing program remains until June 30, 2025 [2] Capital Deployment and Financial Health - Chubb has a strong history of capital deployment, with a 10-year CAGR of 3.8% in dividends, marking the 32nd consecutive year of dividend increases [3] - The company repurchased $385 million worth of shares in Q1 2025, with $1.2 billion remaining in its share repurchase authorization as of March 31, 2025 [4] Market Position and Growth Strategy - Chubb is a leading provider of property and casualty insurance, operating in over 50 countries, and is the largest publicly traded P&C insurer by market capitalization [5] - The company is focusing on growth opportunities in the middle-market segment and is making strategic investments to accelerate expansion [6] Underwriting and Financial Performance - Chubb is known for its prudent underwriting practices, achieving one of the lowest combined ratios in the industry, with a net margin improvement of 980 basis points over the past two years [7] - The company's return on equity stands at 13.6%, exceeding the industry average [7] Stock Performance and Valuation - Chubb's stock has gained 6.5%, underperforming the industry but outperforming the sector and the S&P 500 composite [8] - The price-to-book multiple is currently at 1.67, above its five-year median of 1.58, indicating a premium valuation [9] Analyst Outlook - The consensus estimate for 2025 and 2026 earnings has increased by 1.8% and 0.3%, respectively, reflecting analyst optimism [11] - The Zacks average price target for Chubb is $308.38 per share, suggesting a potential upside of 4.8% from the last closing price [12]