Insurance holding company American Financial Group (AFG) has declared a special one-time dividend of $14 per share, in addition to the $0.50 quarterly cash dividend that was last paid on April 26.
The dividend is payable on June 15 to shareholders of record as of June 8. This announcement comes after American Financial sold its annuity businesses to Massachusetts Mutual Life Insurance Company (MassMutual) for an after-tax cash consideration of $3.5 billion.
With this special dividend, American financial will disburse about $1.2 billion to its shareholders. Earlier in May, the company authorized a stock buyback program of an additional 5 million shares to be executed by the end of 2025.
American Financial Co-CEOs Carl H. Lindner III and S. Craig Lindner said, “The disposition of our annuity business sharpens our focus exclusively on the Specialty P&C market and generates substantial excess capital for AFG.” (See American Financial Group stock analysis on TipRanks)
They further added, “Our excess capital remains at a significant level, which affords us the financial flexibility to make opportunistic repurchases, pay additional dividends, grow our Specialty P&C business organically and through acquisitions and start-up that meet our target return thresholds.”
On May 10, Raymond James analyst Charles Peters reiterated a Hold rating on the stock but did not assign any price target.
On May 6, the other analyst covering the stock, Piper Sandler’s Paul Newsome, reiterated a Buy rating with a $138 price target (3.7% upside potential). The two ratings add up to a Moderate Buy consensus rating.
Shares have gained about 120.6% over the past year.
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