The company provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance.
The current company arose when ACE Limited acquired Chubb in 2016, and then adopted the Chubb name. Its core operating insurance companies are rated “AA” (Very Strong) for financial strength by Standard & Poor’s and “A++” (Superior) by A. M. Best, with stable outlooks from both agencies.
Its long history of consistent earnings growth and dividend payments makes it a solid company. It is considered a solid and well-diversified business with a durable competitive advantage over its rivals, which enjoys a solid management and corporate culture.
Consensus estimates call for the company to earn about $10.46 per share this year, up from $7.14 per share last year, and to go to about $11.32 per share next year.
Chubb has paid dividends to investors since 1984 and has increased its payments for four consecutive years. During the past five years, it has increased its dividends at an annual average rate of 9.6%, and its quarterly payment of $2.92 per share currently provides a yield of 2.26%.
The stock exhibits a healthy dividend payout ratio of 35%, which means the company is retaining a large percentage of earnings to reinvest or grow the business. Its p/e ratio of 15.5 is 35.2% below the S&P 500 index, and its price to book ratio of 1.15 is 51.7% below the index.
Technically, the stock also looks attractive. Its beta (a measure of the volatility, or systematic risk in comparison to the market as a whole) is 0.87, so the stock is 13% less volatile than the market.
CB’s dividend reinvestment plan charges no fees for cash investing, dividend reinvestment, safekeeping, automatic investment or termination of the plan. With the stock being fundamental and technically attractive, this company is an appropriate holding for investors who have a long-term investment horizon.
Subscribe to Vita Nelson’s DirectInvesting here…
This article was originally published by MoneyShow.com: Founded in 1981, MoneyShow is a privately held financial media company headquartered in Sarasota, Florida. As a global network of investing and trading education, MoneyShow presents an extensive agenda of live and online events that attract over 75,000 investors, traders and financial advisors around the world.