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Brown & Brown Boosts Dividend 6.3%, Adds $100M Buyback

Source: Dow Jones

Posted on 20 Oct 2011

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Brown & Brown Inc. raised its quarterly dividend 6.3% Wednesday and authorized as much as $100 million of stock buybacks, joining a growing list of companies that have boosted shareholder payouts in an effort to bolster investors' confidence.

More companies have increased dividends and share buybacks over the past few months after a volatile August pummeled many of their stocks. Extremely low interest rates also have pressured insurers' investment income, making payouts to shareholders a more attractive use of cash.

The dividend increase amounts to half a cent, bringing Brown & Brown's quarterly dividend to 8.5 cents a share. It will cost the company an additional $2.9 million each year. Brown & Brown has now boosted its dividend 18 years in a row. The company meanwhile said its share-repurchase authorization will last for the next 12 months.

The insurance agency and brokerage firm on Monday reported slightly lower earnings due to higher expenses, though the company also generated more revenue from commissions and fees.

Brown & Brown has nevertheless continued to spend its large cash stockpile on payouts to shareholders as well as acquisitions.