Updated 3/6/25
Chubb Limited (CB) is a well-established player in the global insurance market, known for its disciplined underwriting and financial strength. Operating in over 50 countries, the company provides a mix of commercial and personal insurance, reinsurance, and life insurance. With a reputation for stability and a strong history of shareholder returns, it’s no surprise that many investors consider Chubb a solid option for long-term dividend income.
For those looking to build a portfolio that prioritizes dividends, Chubb offers a compelling mix of moderate yield, conservative payout ratios, and consistent dividend growth. While it might not boast the highest yield, it’s a company that knows how to balance financial health with rewarding its investors. Let’s take a closer look at its dividend potential and overall financial standing.
Key Dividend Metrics
📈 Forward Dividend Yield: 1.27%
💰 Annual Dividend per Share: $3.64
📅 Next Dividend Payment: April 4, 2025
🚀 5-Year Dividend Growth Rate: Around 3.5% per year
🔒 Payout Ratio: 15.81% (strong coverage)
📉 Current Yield vs. 5-Year Average: Below the 1.71% historical average
📊 Ex-Dividend Date: March 14, 2025
Dividend Overview
Chubb isn’t the highest-yielding stock in the dividend universe, but what it lacks in yield, it makes up for in reliability. The current yield sits at 1.27%, which is lower than its five-year average of 1.71%. That suggests the stock is trading at a premium compared to historical levels, which is something to keep in mind for those focused on maximizing yield.
What really stands out is the low payout ratio of 15.81%. This means Chubb is only distributing a small portion of its earnings as dividends, leaving plenty of room for future growth. Even if the company hits a rough patch, the dividend is unlikely to be in danger.
Consistency is another strong point. Chubb has been steadily increasing its dividend year after year, reinforcing its commitment to rewarding shareholders. While some companies offer a higher starting yield, Chubb’s strength lies in its ability to keep those dividends growing over time.
Dividend Growth and Safety
One of the most important factors in evaluating a dividend stock is how sustainable those payments really are. Chubb’s ultra-low payout ratio gives it a ton of breathing room, meaning it can continue increasing dividends without stressing its financials.
With free cash flow of $12.65 billion, Chubb generates more than enough cash to keep rewarding shareholders. On top of that, its return on equity (ROE) of 14.6% shows that the company is using its capital effectively.
In terms of growth, Chubb’s dividend has been increasing at a rate of roughly 3.5% per year over the past five years. That’s solid, but not the fastest-growing dividend in the market. Some investors might prefer companies with higher dividend growth rates, but Chubb makes up for it with consistency and strong fundamentals.
For those looking for safety above all else, this is a company that delivers. The balance sheet is healthy, earnings are strong, and the dividend is well protected.
Chart Analysis
Price Action and Moving Averages
The chart for Chubb Limited (CB) shows a stock that has been in a volatile but generally upward trend over the past year. The price surged to a peak close to $300 before pulling back and entering a period of choppiness. More recently, there was a breakout above the 50-day moving average, and the stock has moved back above the 200-day moving average.
The 50-day moving average (orange line) had been serving as resistance for a while, but now the price is testing levels above it. Meanwhile, the 200-day moving average (blue line) has been rising steadily, reinforcing a longer-term uptrend. However, the price action over the past few months suggests that the stock has had a tough time holding onto gains, with multiple failed attempts to sustain moves higher.
Volume Trends
Volume has been relatively steady, with a few noticeable spikes. The largest volume bar in the past year came around October, likely signaling an event-driven price move. More recently, volume remains near its average, suggesting a lack of major institutional buying or selling pressure at this moment.
If the stock is going to hold above key moving averages, an increase in volume would be a bullish signal, as it would indicate conviction behind the recent move. Otherwise, it may struggle to maintain its current price level and could pull back.
Relative Strength Index (RSI)
The RSI, sitting around 36.64, indicates that the stock is nearing oversold territory but hasn’t quite reached extreme levels. Typically, a reading below 30 would signal an oversold condition, potentially pointing to a bounce. At this level, it’s more of a cautious signal that the stock is weak but not necessarily primed for an immediate reversal.
RSI has been declining from its highs in recent months, reflecting the general cooling-off period in the stock’s momentum. If it starts to turn higher, it could indicate renewed strength in the stock. However, if RSI continues to hover near these levels, it may suggest further downside or consolidation ahead.
Recent Candlestick Patterns
Looking at the most recent five candlesticks, there’s a mix of long upper wicks and small-bodied candles, signaling some indecision in the market. The presence of these wicks suggests that buyers have been stepping in, but they aren’t able to sustain the price at higher levels.
The last few candles also show relatively narrow ranges, meaning that volatility has tightened. When price action compresses like this, it often leads to a larger move in either direction. If the stock can push higher and close above recent highs with strong volume, it could confirm a breakout. But if sellers take control and push the price below the moving averages again, it could lead to another test of recent lows.
Analyst Ratings
📊 Chubb Limited (CB) has recently seen a mix of upgrades and downgrades, reflecting different perspectives from analysts on its future performance.
🔼 Upgrades
- 🏦 Keefe, Bruyette & Woods: On January 31, 2025, an analyst maintained an Outperform rating on Chubb and raised the price target from $328 to $329. This suggests confidence in the company’s ability to continue delivering strong results.
- 📈 RBC Capital: On January 30, 2025, an analyst reaffirmed an Outperform rating with a price target of $320, citing optimism about Chubb’s steady growth and market position.
- 🏆 JMP Securities: On January 29, 2025, an analyst kept a Market Outperform rating and set a price target of $325, signaling expectations that Chubb will outperform its industry peers.
🔽 Downgrades
- ❌ BofA Securities: On October 4, 2024, an analyst downgraded Chubb from Neutral to Underperform, even while raising the price target from $264 to $275. The downgrade was based on concerns that Chubb’s growth rate is slowing compared to competitors, despite its recent stock performance.
- ⚖️ Barclays: On January 6, 2025, an analyst maintained an Overweight rating but lowered the price target from $349 to $324 due to concerns about future growth potential.
- 📉 Wells Fargo: On January 14, 2025, an analyst kept an Equal-Weight rating but reduced the price target from $268 to $264, signaling expectations that Chubb’s performance will align with the broader market rather than exceed it.
🎯 Consensus Price Target
📌 As of February 28, 2025, the consensus 12-month price target for Chubb Limited is approximately $299.50. Analyst expectations range from a low of $264 to a high of $329, indicating a potential upside of about 4.91% from the current stock price of $285.48.
Earning Report Summary
Chubb Limited just released its latest earnings report, and there’s a lot to unpack. The company had a solid year overall, though the latest quarter showed a bit of a slowdown in some areas.
Fourth-Quarter Highlights
The company pulled in $2.575 billion in net income, or $6.33 per share, which was a bit of a drop compared to last year’s $3.3 billion, or $8.03 per share. The decline was largely due to some losses in Chubb’s investment portfolio and currency fluctuations, which are always tricky to predict.
Core operating income, which is a key measure of profitability, came in at $2.451 billion or $6.02 per share. That’s down from $3.41 billion the year before, marking a 28 percent decline.
On the bright side, premiums are still on the rise. Chubb reported $12.1 billion in net premiums written, with its Property & Casualty (P&C) and Life Insurance segments seeing growth of 6.7 percent and 7.6 percent, respectively. The combined ratio, which measures underwriting profitability, was 85.7 percent, signaling that the company is managing its risks well.
Full-Year 2024 Performance
For the full year, Chubb reported $9.27 billion in net income, which translates to $22.70 per share. That’s actually up 2.7 percent from the previous year, so despite some challenges, the company ended the year on a high note.
Core operating income for the year came in at $9.197 billion or $22.51 per share, which is just slightly lower than last year. One major highlight was record-breaking net investment income, which helped balance out some of the weaker areas.
Chubb also saw improvements in its book value, which was up 8.8 percent year over year, while tangible book value jumped 14.1 percent. That’s always a positive sign for long-term investors. However, foreign currency losses did knock book value down a bit, costing the company about $1.26 billion after taxes.
CEO’s Take and Future Outlook
CEO Evan Greenberg called the year a big success, pointing to record investment income and strong premium growth. He acknowledged some challenges, particularly in the agriculture segment, but overall, he believes Chubb is in great shape.
Looking ahead, the company expects to keep growing its earnings at a double-digit pace, with strong contributions from its underwriting business, investment portfolio, and life insurance division. If things go as planned, Chubb should remain a solid performer for investors looking for steady, long-term growth.
Financial Health and Stability
A dividend is only as good as the company’s ability to keep paying it, so it’s worth digging into Chubb’s financials.
- Total Cash: $7.43 billion
- Total Debt: $20.72 billion
- Debt-to-Equity Ratio: 30.29%
The company carries some debt, but nothing excessive for a business of this scale. The debt-to-equity ratio is comfortably low, and the company’s cash position provides a strong buffer against any financial turbulence.
Chubb also remains solidly profitable, with net income of $9.27 billion. One thing to note is that quarterly earnings have declined by 22% year-over-year. While that’s a notable drop, it hasn’t impacted the company’s ability to generate cash and maintain its dividend.
Operating margins of 21.37% show that the company maintains strong profitability despite market fluctuations. As long as Chubb continues executing well, there’s little reason to worry about its ability to sustain its dividend program.
Valuation and Stock Performance
At a price-to-earnings (P/E) ratio of 12.61 based on trailing earnings and 13.40 forward-looking, Chubb is trading at a reasonable valuation. It’s not a bargain, but it’s also not outrageously expensive. The price-to-book ratio of 1.79 suggests the stock is slightly above historical valuation levels, but not to a degree that would raise red flags.
Looking at stock performance, shares have traded between $238.85 and $302.05 over the past year. Currently sitting at $286.29, the stock is near the higher end of its range.
- 50-day moving average: $272.37
- 200-day moving average: $275.35
The fact that Chubb is trading above both its short- and long-term moving averages suggests positive momentum. For investors who like to time their entries, it might be worth waiting for a pullback, especially since the dividend yield is below its historical average.
Risks and Considerations
No investment is without risk, and Chubb is no exception. While it’s a strong company, there are some factors that investors should keep in mind.
🔹 Interest Rate Impact: Insurance companies like Chubb generate significant income from fixed-income investments. Changes in interest rates can affect their investment income, creating fluctuations in earnings.
🔹 Insurance Industry Cycles: The insurance business can be volatile, especially when major disasters strike. Hurricanes, wildfires, and other catastrophic events can lead to higher claims and temporarily impact profits.
🔹 Dividend Growth vs. Inflation: While Chubb’s dividend is growing, it’s not exactly racing ahead. The 3.5% annual increase is solid, but for those looking to outpace inflation, faster-growing dividend stocks might be more appealing.
🔹 Stock Price Volatility: With a beta of 0.67, Chubb is less volatile than the broader market. That’s great for stability, but it also means investors shouldn’t expect massive price appreciation during strong bull markets.
Final Thoughts
Chubb is the kind of stock that appeals to dividend investors who value safety, consistency, and long-term reliability. While the yield isn’t particularly high at 1.27%, the company’s low payout ratio, strong financials, and steady dividend growth make it a solid choice for investors focused on sustainability.
That being said, the stock is currently trading near the higher end of its range, and the yield is below its historical average. For those prioritizing entry points, patience might be key. But for investors who want a strong, dependable dividend payer that isn’t going to cut payouts anytime soon, Chubb is well worth considering.
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