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The last name on today's list is -- surprise, surprise -- another insurance company.
HCC Insurance Holdings(HCC) is having a strong showing this year, up more than 10% since the start of January, vs. gains of less than half that for the
S&P 500. The firm is a leader in smaller insurance markets where competition is less. That skirts the commoditization woes that most other insurers face, even if it makes underwriting profits a bit less predictable in the short-term. Longer-term, it means that underwriting profits are much bigger than those of firms that focus on broad-line insurance where risks are overly-quantified and opportunities are arbitraged away.
HCC has paid a 15.5 cent dividend for the past three quarters (with a fourth slated for payment on July 16), and the firm looks due for a bigger payout. Currently just over 20% of profits get pushed through to investors -- I'm expecting a hike in the next quarter on HCC's 2% yield.
To see these dividend plays in action, check out the
Potential Financial Sector Dividend Stocks portfolio on Stockpickr.
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join Stockpickr today to create your own dividend portfolio.
-- Written by Jonas Elmerraji in Baltimore.