Up to date on March twentieth, 2024 by Bob Ciura

Solely corporations within the S&P 500 Index, with at the very least 25 years of dividend development, can declare the title of being a Dividend Aristocrat. This membership is so unique that there are solely 68 such corporations within the S&P 500 Index.

In consequence, Dividend Aristocrats are comparatively uncommon among the many broader S&P 500.

With this in thoughts, we created an inventory of all 68 Dividend Aristocrats, together with vital monetary metrics like price-to-earnings ratios and dividend yields.

You possibly can obtain an Excel spreadsheet with the total record of Dividend Aristocrats by clicking on the hyperlink beneath:

 

Disclaimer: Positive Dividend is just not affiliated with S&P International in any means. S&P International owns and maintains The Dividend Aristocrats Index. The data on this article and downloadable spreadsheet is predicated on Positive Dividend’s personal evaluation, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person traders higher perceive this ETF and the index upon which it’s based mostly. Not one of the data on this article or spreadsheet is official information from S&P International. Seek the advice of S&P International for official data.

Chubb Ltd. (CB) has elevated its dividend for 31 consecutive years. Chubb yields 1.3% proper now, which isn’t a excessive dividend yield. In reality, it’s beneath the S&P 500 Index’s present dividend yield of 1.5%.

Whereas Chubb is just not a high-yield dividend inventory, it does present constant dividend will increase every year, backed by a powerful enterprise mannequin.

Enterprise Overview

Chubb is predicated in Zurich, Switzerland, and gives insurance coverage providers, together with property & casualty insurance coverage, accident & medical health insurance, life insurance coverage, and reinsurance.

The corporate operates in over 50 nations and territories. It’s the world’s largest publicly traded P&C insurance coverage firm and the most important industrial insurer within the U.S.

Chubb has a big and diversified product portfolio.

Supply: Investor Presentation

For its fiscal fourth quarter, Chubb Ltd reported internet written premiums of $11.6 billion, which was 13% greater than the web written premiums that Chubb generated through the earlier yr’s quarter. Web written premiums had been up 12.5% year-over-year within the firm’s International P&C enterprise unit, whereas different enterprise items equivalent to Life noticed strong development as effectively.

Chubb was in a position to generate internet funding revenue of $1.37 billion through the quarter, or $1.49 billion after changes, which was up by a pleasant 33% in comparison with the earlier yr’s interval. Chubb generated earnings-per-share of $8.30 through the fourth quarter, which was means above what the analyst group had forecasted.

Chubb’s sturdy profitability through the quarter may be defined by a superb mixed ratio, regardless of some pure disasters that impacted Chubb’s disaster losses.

Progress Prospects

Chubb has created important worth for shareholders when it comes to rising its ebook worth per share, a key metric for insurance coverage corporations. Since 2009 the corporate’s ebook worth has grown at a compound common development price of ~7% per yr.

As an insurance coverage firm, Chubb has a big pool of collected premium revenue that has not been paid out in claims to prospects. This is named float. Insurers make investments premiums as quickly as they’re collected to earn curiosity or different revenue.

Larger rates of interest generally is a constructive catalyst for Chubb’s funding revenue. Will increase in portfolio funding yield will generate extra pre-tax internet funding revenue per yr.

The corporate additionally buys again shares which can assist develop earnings. Total, we estimate Chubb might develop earnings-per-share by 5% yearly over the following 5 years.

Aggressive Benefits & Recession Efficiency

Chubb’s aggressive benefits are its main trade place in addition to its monetary power. First, Chubb is the world’s largest publicly traded property and casualty insurance coverage firm and the most important industrial insurer in america. It has a dominant place throughout its product classes, which helps it to retain prospects.

Additionally it is in a powerful monetary place. Chubb is rated A by Customary & Poor’s and Aa3 by Moody’s, the foremost U.S. credit standing companies. Its wholesome stability sheet and excessive credit standing present the corporate with monetary power that helps retain shoppers and make investments for development.

The insurance coverage trade may be cyclical. Because the financial strengths, individuals are likely to have extra discretionary capital that can be utilized so as to add to their insurance coverage insurance policies. If the economic system weakens, prospects might pull again on their spending. This occurred through the Nice Recession for Chubb.

• 2007 earnings-per-share of $8.07
• 2008 earnings-per-share of $7.72 (-4.3% lower)
• 2009 earnings-per-share of $8.17 (5.8% improve)
• 2010 earnings-per-share of $7.79 (-4.7% lower)
• 2011 earnings-per-share of $6.96 (-10.7% lower)

Though Chubb didn’t see fairly as extreme revenue declines as many different monetary companies, earnings-per-share did expertise some variability. Nevertheless, Chubb remained extremely worthwhile through the Nice Recession, which allowed it to proceed elevating its dividend even by means of the steep financial downturn. Chubb additionally remained extremely worthwhile in 2021, even through the coronavirus pandemic.

Whereas earnings-per-share might fluctuate from yr to yr, the corporate’s ebook worth has elevated extra persistently.

Valuation & Anticipated Returns

Utilizing Chubb’s most up-to-date share value of ~$259, together with anticipated earnings-per-share of $21.70 per share anticipated for 2024. In consequence the inventory trades for a P/E of 11.9, which is above our honest worth P/E of 9.5.

If shares had been to revert to this common worth by 2029, traders would see complete returns lowered by about -4.4% per yr.

Taking the corporate’s anticipated EPS development price of 5%, dividend yield of 1.3%, and valuation modifications collectively results in complete anticipated returns of 1.9% per yr over the following 5 years.

Thus, valuation headwinds might outweigh many of the returns to be generated from the corporate’s EPS development and dividend.

Remaining Ideas

Whereas Chubb is a well-managed and diversified insurance coverage inventory with a protracted historical past of rising ebook worth, we consider the inventory will generate low complete returns within the coming years.

That is as a result of excessive valuation of the inventory when in comparison with its 10-year common, in addition to the low dividend yield because of the rising share value. The steadiness in a cyclical trade is noteworthy, as is the distinctive dividend development document, however the present valuation makes us lean towards a maintain suggestion.

Moreover, the next Positive Dividend databases comprise essentially the most dependable dividend growers in our funding universe:

When you’re on the lookout for shares with distinctive dividend traits, contemplate the next Positive Dividend databases: