Insurance companies remain one of the most boring yet profitable ways to collect steady dividends. It all comes down to premiums and the interest or float those premiums generate. For many insurance companies, like our latest Best Dividend Capture Stocks List pick, that float can generate billions in interest and gains for its shareholders. And in the case of our pick, set forth a path to steady dividend growth.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
Our pick is one of the largest insurance firms in the world, with billions of policies underwritten across various business lines. This includes everything from bread-and-butter term life insurance policies to specialty and reinsurance operations. This multi-line approach to the insurance industry allows our pick to generate a wide range of premiums and creates diversification to its cash flows. As such, it’s able to use that cash to create float premiums to pay its investors.
But don’t let our pick’s hulking size confuse you into thinking it’s all slow growth.
It’s quite the opposite. Since its turnaround after the Great Recession, our pick has shed slow-growth businesses and troubled assets. A focus on high-margined specialty insurance, technology integrated underwriting, and new reinsurance operations has immensely boosted profits at the 100-year-old+ firm.
The result is that our pick’s steady cash flows, successful turnaround, and growth have made our pick a wonderful dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Monday, March 17, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 2.6 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest insurance play could be a lucrative option.
