The Top Dividend Achievers in Insurance

Dividend-paying companies are the oasis in the desert of underperforming stocks. They offer solid payouts today and not simply the promise of gains tomorrow (though they do offer that, too!). In fact, dividend investing is such an attractive alternative, that super-investor Warren Buffett has made it a significant component of his portfolio.

A great way to find outperforming dividend-paying companies is to examine the stocks in the "Dividend Achievers Select Index," an elite group of companies that have raised their dividends annually over at least the past 10 years. The list was created by Mergent and is now overseen by Indxis, which screens eligible stocks for liquidity and investability. The index features around 140 stocks for 2010.

In case you need further convincing that dividend investing is profitable: According to a study by Ibbotson, reinvested dividends made up about 40% of total stock returns from 1926 to 2006. And as I've argued elsewhere, dividends are the most secure way to build a cash-flow powerhouse.

So let's take a look at the top dividend achievers by yield in the insurance industry. For context, I've also included their five-year annualized dividend growth rate.

Company

Trailing Yield

5-Year Dividend Growth Rate

1. The Chubb Corporation (NYSE: CB  )

2.6%

11.9%

2. AFLAC (NYSE: AFL  )

2.2%

22.3%

3. HCC Insurance (NYSE: HCC  )

2.2%

17.1%

4. StanCorp Financial (NYSE: SFG  )

2.1%

9.9%

5. RLI (NYSE: RLI  )

2%

14.5%

6. Transatlantic Holdings (NYSE: TRH  )

1.7%

14%

7. Brown & Brown (NYSE: BRO  )

1.5%

14.7%

8. Wesco Financial (NYSE: WSC  )

0.5%

2.8%

Source: Indxis.com and Capital IQ, a division of Standard & Poor's.

With cash and Treasuries yielding mere pennies on the dollar, your best bet to beat inflation is in high-yielding stocks like the 13 we've uncovered in a special report. If you'd like free access to this report, click here. Or you can check out other Dividend Achievers in the sidebar to the right.

Interested in reading more about AFLAC? Add it to My Watchlist, which will find all of our Foolish analysis on this stock.

Jim Royal, Ph.D., owns none of the companies mentioned. AFLAC is a Motley Fool Stock Advisor selection. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.


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