April 28, 2025 a 07:31 am
WRB: Dividend Analysis - W. R. Berkley Corporation
W. R. Berkley Corporation showcases a robust dividend profile with an impressive track record of growth and stability. As an entity operating in the insurance industry, it offers a compelling yield complemented by consistent financial performance. This analysis will delve into various aspects of WRB’s dividend strategy, offering insights into its sustainability and attractiveness for dividend-focused investors.
Overview
W. R. Berkley Corporation, a prominent firm in the financial services sector, maintains a competitive dividend yield of 2.71%, reflecting its capability to return value to shareholders. With a current dividend per share of $1.33 USD, the company boasts a remarkable 42-year history of consistent dividend payments, with no recent cuts or suspensions.
| Details | Value |
|---|---|
| Sector | Insurance |
| Dividend yield | 2.71 % |
| Current dividend per share | 1.33 USD |
| Dividend history | 42 years |
| Last cut or suspension | None |
Dividend History
With a stable payment history spanning over 40 years, WRB's dividend legacy speaks to its financial resilience and shareholder commitment. This longstanding distribution practice is crucial for investor confidence, indicating sustained profitability and cash flow management.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 0.08 |
| 2024 | 1.72 |
| 2023 | 1.29 |
| 2022 | 0.59 |
| 2021 | 0.89 |
Dividend Growth
Dividend growth is an essential metric for evaluating long-term investment viability. WRB has demonstrated consistent increases in dividend payments, reflecting positive corporate earnings growth and financial health.
| Time | Growth |
|---|---|
| 3 years | 24.49 % |
| 5 years | 18.21 % |
The average dividend growth is 18.21% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio
The payout ratio assesses the proportion of earnings distributed as dividends, acting as a proxy for financial sustainability. WRB maintains a conservative payout strategy, crucial for balancing growth investments with shareholder returns.
| Key figure ratio | Value |
|---|---|
| EPS-based | 30.86 % |
| Free cash flow-based | 17.93 % |
With a 30.86% payout based on EPS and a 17.93% payout based on FCF, WRB exhibits a prudent dividend policy, ensuring ample room for growth and stability during economic fluctuations.
Cashflow & Capital Efficiency
A firm's ability to generate cash flow and efficiently allocate capital is indicative of its operational health and sustainability. By analyzing these metrics, investors can gauge the firm's financial robustness and strategic direction.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 15.27 % | 14.87 % | 12.40 % |
| Earnings Yield | 7.51 % | 7.14 % | 6.81 % |
| CAPEX to Operating Cash Flow | 2.87 % | 1.81 % | 2.05 % |
| Stock-based Compensation to Revenue | 0.40 % | 0.42 % | 0.44 % |
| Free Cash Flow / Operating Cash Flow Ratio | 97.13 % | 98.19 % | 97.95 % |
The cash flow metrics over recent years highlight WRB's efficiency and capacity to cater to capital expenditures and shareholder commitments without compromising growth opportunities.
Balance Sheet & Leverage Analysis
A strong balance sheet underpins a company’s ability to weather financial storms and grasp strategic initiatives. WRB's leverage ratios offer insights into its risk profile and borrowing capacity.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.34 | 0.38 | 0.42 |
| Debt-to-Assets | 0.07 | 0.09 | 0.08 |
| Debt-to-Capital | 0.25 | 0.28 | 0.30 |
| Net Debt to EBITDA | 0.36 | 0.79 | 0.73 |
| Current Ratio | 10.77 | 0.43 | 83.09 |
| Quick Ratio | 10.77 | 0.43 | 385.21 |
| Financial Leverage | 4.83 | 4.41 | 5.02 |
WRB’s leverage profile showcases a stable debt strategy, with manageable liabilities compared to equity and assets, indicating a balanced approach to capital structure.
Fundamental Strength & Profitability
Profitability and capital efficiency metrics are vital indicators of WRB's business strength and operational effectiveness. These figures depict the firm's capacity to generate value and deploy capital advantageously.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 20.92 % | 18.53 % | 20.47 % |
| Return on Assets | 4.33 % | 4.20 % | 4.08 % |
| Margins: Net | 12.88 % | 11.38 % | 12.31 % |
| EBIT | 17.53 % | 15.50 % | 16.49 % |
| EBITDA | 17.53 % | 15.33 % | 16.99 % |
| Gross | 100.00 % | 72.30 % | 73.60 % |
| Research & Development to Revenue | 0 % | 0 % | 0 % |
WRB’s consistent profitability metrics, especially its strong return on equity, illustrate its adept management and operational skill, underscoring its competitive industry standing.
Price Development
Dividend Scoring System
| Category | Score | Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 34/40
Rating
With a commendable overall scoring and a solid dividend history, WRB is recommended as a reliable income investment. Its strategic growth, coupled with strong financial fundamentals, positions the corporation well for future dividend sustainability.