Chubb Limited’s CB board of directors is set to propose a 6.5% hike in its dividend. The insurer will now pay, if approved, an annual dividend of $3.88 or 97 cents per share quarterly. The latest hike would mark the 32nd straight year of dividend increase.

Based on the closing price of $281.69 as of Feb. 27, the company’s dividend yield is 1.3%, much above the industry average of 0.2%. This makes the stock an attractive pick for yield-seeking investors. Historically, Chubb has a solid track record of dividend increase, with the metric witnessing a nine-year (2017-2024) CAGR of 3.1%.

The board also declared a quarterly dividend equal to 91 cents per share. Shareholders of record as of March 14, 2025, will receive the increased dividend on April 4. The dividend will be payable out of legal reserves and will be made in U.S. dollars by the company's transfer agent.

Financial Strength and Capital Management

This property and casualty insurer is one of the largest product portfolios in the global insurance industry. CB is focusing on cyber insurance that has immense room for growth, putting in efforts to capitalize on the potential of middle-market businesses, both domestic and international, with a traditional core package as well as a specialty product. Better pricing, business growth and high renewal rates, along with other positives, should help it continue its effective capital deployment.

Chubb boasts a strong capital position, with sufficient cash generation capabilities. Its solid underlying performance produced strong operating cash flow. Chubb continues to have an exceptionally strong capital position and a conservative level of leverage, reflecting strong liquidity. Operating cash flow and adjusted operating cash flow were $16.18 billion and $15.90 billion, respectively, in 2024. Riding on a strong capital position, the company also buys back shares apart from paying dividends.

In 2024, CB repurchased $2.0 billion of shares in a series of open market transactions under the board share repurchase authorizations. For the period Jan. 1, 2025, through Feb. 26, 2025, CB repurchased shares for a total of $148 million in a series of open market transactions under the share repurchase program authorization. As of Feb. 26, 2025, $1.5 billion remained in its share repurchase authorization.

Chubb’s return on equity — a profitability measure of how prudently the company is utilizing its shareholders’ funds — stands at 13.7%, higher than the industry’s average of 7.6%. Its return on equity has been increasing steadily over the last few years.

Zacks Rank and Price Performance

Shares of this Zacks Rank #3 (Hold) property and casualty insurer have gained 12% year to date compared with the industry’s growth of 15.4%. CB’s superior underwriting discipline and sound capital structure should help shares bounce back.

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Other Insurers on the Same Path

Given the solid capital level of the insurance industry and an improving operating backdrop favoring strong operational performance, insurers like Cincinnati Financial Corporation CINF, Principal Financial Group, Inc. PFG and CNA Financial Corporation CNA have resorted to effective capital deployment to enhance shareholders' value. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cincinnati Financial’s consistent cash flow continues to boost liquidity. In terms of capital management, Cincinnati Financial has returned capital to shareholders through share buybacks, regular cash dividends as well as special dividends. The board of directors of Cincinnati Financial has increased the regular quarterly cash dividend by 7% to 87 cents per share. The annual cash dividend rate has been raised for 65 consecutive years, a record which is believed to be matched by only seven other U.S. publicly traded companies.

Principal Financial boasts a strong capital position, with sufficient cash generation capabilities and liquidity. PFG’s wealth distribution through share buybacks and dividend payment looks impressive. The board raised the first-quarter dividend by 9% to 75 cents per share.

Strong balance sheet and cash flows enable CNA Financial to engage in shareholder-friendly moves like dividend hikes. In February 2025, CNA Financial’s board of directors approved a quarterly dividend of 46 cents per share, an increase of 5% from the earlier payout. It also approved a special dividend of $2.00 per share.

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Chubb Limited (CB) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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