Dividend Aristocrat Overview: The Chubb Corporation

About The Chubb Corporation

The Chubb Corporation is the 12th largest property and casualty insurance company in the United States.  Chubb has offices in 27 countries and over 10,000 employees.  Chubb prides itself on its ability to create tailored insurance products for firms in specific fields including information technology, marine operations, health care, museums, and other specialized industries.

Chubb’s history goes back to 1882 when father and son Thomas and Percy Chubb opened a marine underwriting business, insuring ships and cargoes, in the New York City seaport district.   The Chubb Corporation was formed in 1967 and has over thirty subsidiaries.  The company was listed on the New York Stock Exchange in 1984.

The Chubb Group of Insurance Companies reported combined revenues of $13.9 billion in 2013.  2013 net income was $2.3 billion, up 53% from $1.5 billion in 2012.

The company is a member of the S&P 500 index, a Fortune 500 company and trades under the ticker symbol CB.

Chubb Corporation’s Dividend and Stock Split History

Chubb Corporation has increased dividends annually since 1982 and met the Dividend Aristocrat criteria of 25 straight years of dividend growth in 2007.  Since 1989, Chubb Corporation has announced dividend increases in the 1st quarter of the calendar year.  I expect Chubb Corporation to announce their next dividend increase in February and to pay the increased dividend at the beginning of April.

The Chubb Corporation has averaged a dividend growth rate of 7.6% since 1994.

Chubb Corporation stock has an average dividend growth rate of 7.6% since 1994, more than quadrupling over the last 20 years.

Chubb Corporation has a good near and long-term record of dividend growth.  At the end of 2013, Chubb announced a 13.6% increase in the annual dividend for 2014 to $2.00.  From 2009 – 2014, Chubb has a compounded annual dividend growth rate (CADGR) of 7.39%.  Over 10 years, the company has compounded dividends at a rate of 9.87%, boosted by double-digit percentage increases from 2005 – 2008.  Longer term, Chubb has a CADGR of 7.63% over the 20 years from 1994 – 2014.

Since beginning its record of continuously increasing dividends in 1983, Chubb stock has split 2-for-1 twice: in May 1995 and March 2006.  Had you purchased 100 shares of Chubb in December 2007 – just prior to the stock market crash of 2007 – and when the company met the Dividend Aristocrat criteria of 25 consecutive years of dividend increases, you would have paid about $4,600 and collected a total of $132 in dividends in 2008.  That investment would have grown to $9,200 by mid 2014 and you could expect to collect $200 in dividends throughout 2014.  Ignoring reinvesting dividends, this is a compounded annual growth rate of 10.4%, outpacing the S&P 500’s 4.5% annual growth rate during this time.

Direct Purchase and Dividend Reinvestment Plans

Chubb offers both direct purchase and dividend reinvestment plans.  Chubb’s transfer agent, Broadridge, maintains both plans.  Plan information and FAQs for potential participants are available at Broadridge’s web site.  The minimum initial investment is $200; a minimum of $50 is required for additional investments.

The fee to set up a direct purchase or dividend reinvestment account is $15.  When purchasing stock directly through the plan, you’ll pay 10 cents per share plus a $2.50 processing fee.  When you reinvest dividends through the plan, you’ll pay a trading fee of 5% of the amount reinvested up to $2.50 per dividend payment.

When selling shares, you’ll pay a transaction fee of $15 per transaction plus a commission of 10 cents per share.  You’ll minimize fees by buying and selling shares in larger quantities.  Other fees may apply and you should review the plan documents if you’re interested in directly purchasing Chubb stock or participating in the dividend reinvestment plan.

Helpful Links

The Chubb Corporation’s Investor Relations Website

Current quote and financial summary for The Chubb Corporation (finviz.com)

Information on the direct purchase and dividend reinvestment plans for The Chubb Corporation


Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.