It's been a pretty mixed year for shareholders of insurance giant Travelers (TRV) in 2012. Shares have struggled to keep pace with the broad market, climbing just 4.2% since the first trading day of January, and while relative strength has turned up for shares in the last month, investor anxiety across the whole market could keep this stock off of people's radar.
But TRV's dividend won't; during yesterday's earnings call, the firm announced a 12.2% hike to its quarterly payout. That brings this insurer's yield to 2.66%.Travelers has historically been a conservative insurance firm, keeping a strong handle on risk in the years leading up to the financial crisis, and avoiding the losses seen by some of its peers as a result. While that kept this stock on most investors' "boring" list, it's a qualifier that I'd argue most insurance company shareholders should be on the lookout for. Also key to Travelers' success is its network of more than 10,000 brokers and agents -- that large sales force, spread across a similarly large geographic area, has been a big driver of the firm's product growth in the past. While the nascent direct-to-consumer business offers TRV attractive margins, the company would do well not to forget its salespeople. From a financial standpoint, Travelers is still in strong shape. As long as good risk management practices take priority over top-line growth, investors should get rewarded in the long-run. TRV's dividend payout makes it a strong choice for investors looking for insurance company exposure right now. Travelers, one of Greenlight Capital's holdings, shows up on a list of 5 Buy-Rated Insurance Stocks for Long-Term Investors.
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