HCC Insurance Holdings

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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.

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-- Written by Jonas Elmerraji in Baltimore.


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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on MSNBC.com.

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