Chubb, one of my largest individual holdings is rewarding shareholders. The Board of Directors has announced they will be issuing a dividend of 0.73 Cents per share for shareholders of record as of March 22, payable on April 12.
What’s even more interesting is the board of directors announced a proposal to be included in the 2019 annual shareholder meeting that calls for the dividend to be increased to $3 per share per year, which amounts to 0.75 cents per quarter. If this motion is approved, which I will be voting “yes”, then this would represent the 26th annual dividend in row.
This means that Chubb (formerly ACE), has not only paid dividends for 26 years consistently, but has also increased them each each year. This is not an easy task for any company to accomplish so it is certainly a sign of prestige. In 1993, CB (Then ACE) closed for the year at $9.73; if you had put $1,000 into CB in 1993; this would net you 100 shares. These 100 Shares would have generated you $23 in dividends in 1994. Today, that 100 shares would be worth $13,000 and now generate you $300 per year. This is assuming that the dividends were never reinvested, because if you re-invest the dividends the math becomes way more complicated for illustrative purposes and your returns would be much higher.
As I mentioned previously; there are turbulent times ahead, but if you look at Chubb (and many other companies) who have consistently paid dividends in the worst of times then it could be your rock in the storm. Think about it; CB has consistently paid through the 2000 dot com bubble and the 2007 real estate crash. That represents strong leadership from the executives and the board of directors.
This is why I will continue to hold on to CB despite what I believe to be very rough times ahead in 2019. I will use these dividends to either sideline some cash or look for other companies at attractive valuations; I am currently eyeing up Kraft as they appear very attractive to me at first glance considering their recent roller coaster slide. I will need to investigate why Kraft took their nosedive and what the corporate officers are doing about. That said, I expect to receive $500 from the Chubb Dividend and will be very excited once it is further increased.