Travelers Authorizes an Additional $5 Billion Share Repurchase – Buyback Wednesdays

The Travelers Companies, Inc. (TRV) is one of the largest property and casualty insurers in the world that traces its roots back to an accident insurance company in 1864. Headquartered in New York City, the company found its way into the Dow Jones Industrial Average in 2009 after Citigroup lost its vaunted spot in the 30 stock DJIA following the financial crisis.

The company offers insurance through three segments:

1. Personal Insurance – includes home, auto, and other insurance products for individuals.
2. Business Insurance – includes a broad array of property and casualty insurance and insurance-related services
3. Bond and Specialty Insurance – includes surety, crime, and financial liability businesses

On April 19, 2023, Travelers announced an additional $5 billion buyback along with the $1.6 billion remaining under the prior authorization as of March 31, 2023. This represents around 12.5% of its market cap at announcement. The property/casualty insurance giant also announced a $1.00/share quarterly dividend, a 7.5% increase from prior dividend of $0.93.

Dividend & Share Repurchase History:

Travelers has a long history of paying dividends spanning 23 consecutive years. The company recently increased its streak of raising dividends to 18 years in a row. In a 13-year period, the dividend has almost tripled from $0.36/share to $1.00/share. The company’s lowest quarterly FCF of $628 million (during peak COVID) covers the current quarterly dividend commitment almost three times over. With a forward yield of 2.23% and a payout ratio of 30.3%, there is additional room for the dividend to grow.

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