A Look at Assurant, Another Top Dividend Grower



Assurant’s revenue and earnings in 2015 and 2016

Assurant’s (AIZ) revenue fell 1% and 27% in 2015 and 2016, respectively. Its US revenue rose in 2015 before falling in 2016, and its international revenue fell in both years, along with its net earned premiums, net investment income, and net realized gains on investments. Its fees and other income rose in both years.

A gain on the curtailment of a pension plan also enhanced Assurant’s 2016 performance, which was offset by a loss on debt extinguishment. The company’s losses and expenses rose 5% in 2015 before falling 34% in 2016, and its interest expenses fell in 2015 before rising in 2016. Its income before tax fell 73% in 2015 before growing 322% in 2016. These developments led to its EPS (earnings per share) falling 68% in 2015 and growing 345% in 2016. Share buybacks also enhanced its EPS.

Assurant’s revenue and earnings in 1H17

In 1H17, Assurant’s revenue fell 20%, with every segment seeing lower revenue. Losses and expenses fell 18%, and its income before tax fell 31%. These ups and downs led to the company’s EPS falling 22% during the period. Share buybacks enhanced its EPS. The company did not generate enough free cash flow in 2016 to pay off its dividends, and the balance has fallen year-to-date.

The First Trust Value Line Dividend Index ETF (FVD), a dividend fund, has exposure to Assurant. It has a 2.1% dividend yield and a PE (price-to-earnings) ratio of 20.4x. The Vanguard Dividend Appreciation ETF (VIG), which also has exposure to Assurant, has a 2% dividend yield and a PE ratio of 23.5x. In the next part, we’ll look at the company’s dividends and compare its performance with that of broad market indexes (SPX-INDEX) (SPY) (DJIA-INDEX) (DIA) (COMP-INDEX) (ONEQ).

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