Dividend Aristocrats In Focus: Chubb Ltd.

Only companies with at least 25 years of dividend growth can claim the mantle of a Dividend Aristocrat. This club is so exclusive that there were only 53 such companies at the end of 2018.

Four new companies joined this group in 2019, one of which was Chubb Ltd. (CB).

Chubb is a global provider of insurance and reinsurance services. The company is headquartered in Zurich, Switzerland. The stock currently yields 2.2%, which is a slightly-above-average yield as the S&P 500 Index on average yields 2%. However, after accounting for dividend withholding taxes, Chubb has a more modest 1.4% dividend yield.

Still, Chubb is a high-quality business, with growth potential in the U.S. and the international markets, as well as a strong balance sheet and a steadily-rising dividend.

Business Overview

Chubb Ltd is a global provider of insurance and reinsurance services headquartered in Zurich, Switzerland. The company has operations in 54 countries and territories. Chubb provides insurance services including property & casualty insurance, accident & health insurance, life insurance, and reinsurance.

CB Overview

Source: Investor Presentation

The current version of Chubb was created in 2016 when Ace Limited acquired the ‘old’ Chubb and adopted its name. U.S. investors can initiate an ownership position in Chubb through shares listed on the New York Stock Exchange under the stock symbol CB.

Chubb reported (10/23/18) financial results for the third quarter of fiscal 2018 in late October. In the quarter, the company’s most widely-cited profitability metric (core operating income excluding catastrophic losses) increased by 2.9% versus the same quarter a year ago. Chubb’s book value per share grew 0.4% versus the second quarter of 2018. Importantly, Chubb’s combined ratio in the quarter was 90.9%, showing very profitable underwriting activity.

Chubb’s product offerings include property & casualty insurance, accident & health insurance, insurance and reinsurance. The previous incarnation of Chubb was purchased by Ace Limited in 2016. Ace Limited then adopted the Chubb name. Chubb has a current market cap of $61 billion.

Growth Prospects

Chubb’s earnings-per-share have barely moved over the past ten years. The company earned $8.89 per share in 2017, which was a very small improvement from 2008’s $7.72 total.

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