Updated 3/13/25
RLI Corp. might not be a household name, but that’s actually part of its charm. This is a company that’s spent decades doing the right things quietly—without the flash, without the drama. Based in Peoria, Illinois, RLI operates in the insurance space, focusing on niche areas like transportation, surety, and professional liability coverage. Since 1965, it has earned a reputation for steady hands, conservative underwriting, and a smart approach to risk.
Trading around $77.84 with a market cap near $7.1 billion, RLI doesn’t scream attention, but dividend investors looking for reliability and resilience may find something special under the hood.
Recent Events
So far, 2025 has been a relatively steady year for RLI. The stock’s been drifting between $67 and $91 over the past 12 months, and while its 6.36% gain hasn’t outpaced the broader market, it’s held up respectably. This is par for the course with RLI—it’s not designed to race ahead but to provide steady returns with minimal noise.
In January, RLI executed a 2-for-1 stock split, making shares more accessible to a wider range of investors. Then came the announcement of its next dividend, set to be paid on March 20. For longtime shareholders, these are familiar beats in a rhythm that’s been playing consistently for decades.
Institutional investors clearly see value here, holding over 80% of the float. Insider ownership is modest at just under 5%, but that’s fairly typical for a company of this size and maturity.
Key Dividend Metrics
💰 Forward Dividend Yield: 0.77%
📆 Dividend Growth Streak: 48 consecutive years
📈 5-Year Average Yield: 0.87%
🔁 Payout Ratio: 15.24%
📉 Dividend Date: March 20, 2025
💸 Free Cash Flow (ttm): $1.22 billion
Dividend Overview
At first glance, RLI’s dividend might not knock your socks off. With a forward yield just under 0.8%, income investors might be tempted to skip right past it. But there’s more going on here than meets the eye.
This is a company that has raised its regular dividend for 48 straight years—an incredible achievement in any industry, let alone insurance. The yield may be low, but it comes with a strong history of consistency and, just as importantly, a healthy balance sheet backing it up.
RLI has also made a habit of paying out special dividends when the financials allow for it. These aren’t guaranteed, but they do show up often enough to be part of the story. For investors willing to wait, those extras can really add up.
Dividend Growth and Safety
One of RLI’s biggest strengths is how conservatively it manages its dividend. The current payout ratio is just over 15%, meaning the company is only using a small slice of its earnings to fund the dividend. That leaves plenty of breathing room—even if profits were to dip temporarily, there’s enough cushion to keep the dividend intact.
Over the years, dividend growth has been modest, but reliable. You won’t see flashy double-digit hikes here. Instead, RLI offers slow, steady increases that reflect its conservative culture. Combined with the occasional special dividend, it’s a formula that’s rewarded patient shareholders time and again.
The overall safety of the dividend is about as solid as it gets. With low debt, strong cash flow, and a disciplined management team, there’s very little to worry about on this front.
Chart Analysis
Current Market Phase
RLI appears to be transitioning through the markdown phase following a classic Wyckoff distribution structure. After a strong markup phase from late summer into November, the stock peaked near the $91 level. What followed was a swift and decisive selloff—clear signs of distribution playing out at the top with increased volume and volatility. Now, the price has broken below the 50-day moving average, and more recently, it’s also losing ground beneath the 200-day moving average. That shift points to a change in sentiment and longer-term trend direction.
The current area around $74 is showing signs of support testing, but the failure to reclaim and hold above the 200-day suggests the market is leaning toward bearish control. Momentum has shifted away from buyers.
Volume Analysis
Volume spikes in late January and early February during the price drop support the markdown narrative. These bursts likely represent institutional selling pressure exiting positions after the distribution range. Since then, volume has dried up somewhat, indicating a lack of strong buying interest on the recent bounce attempts.
There’s no clear evidence yet of accumulation returning to the tape. Instead, volume is neutral to slightly bearish, aligning with the ongoing downtrend.
Moving Averages
The 50-day moving average is now sloping downward and has recently crossed below the 200-day moving average—a bearish crossover known as a death cross. While not always a perfect predictor, this crossover tends to confirm weakness in the intermediate-term trend. The stock’s failure to retake either moving average reinforces this outlook. Bulls will need to see the price recover and hold above the 200-day to even begin talking about a trend reversal.
RSI and Momentum
The relative strength index (RSI) is currently trending lower and appears to be heading toward oversold territory again, without having shown any real bullish divergence. This confirms that momentum is still to the downside. Each rally attempt is weaker than the last, and RSI has been making lower highs since the stock peaked back in November. This fading momentum suggests sellers are still in control, and buyers are not stepping in with conviction.
Recent Candle Behavior
Looking at the last five candles, the price action has been cautious. Small-bodied candles with upper wicks near $75 reflect selling pressure on any intraday rally. None of these sessions closed near the high, a sign that bulls lack strength even on green days. One or two of the recent candles have long lower shadows, indicating some dip buying, but without follow-through. That’s often a sign of weak hands rather than institutional support.
The latest candle showed a narrow range between $72.93 and $74.39, closing slightly above the open but still below both moving averages. This type of candle doesn’t scream strength—it suggests indecision with a bearish tilt given the trend context.
Analyst Ratings
🔻 In late January 2025, RLI Corp. saw a shift in sentiment from Jefferies, which downgraded the stock from Buy to Underperform. This double downgrade wasn’t taken lightly by the market, especially with the firm also slashing its price target from $95 to $61. The reasoning centered on expected softness in the property and casualty insurance space. The view was that RLI’s premium valuation wasn’t fully reflecting slower sector growth, particularly in commercial lines where pricing pressure is emerging.
🟡 On a more moderate note, Compass Point kept its Buy rating intact but lowered its target from $92.50 to $82. While still constructive on the stock, the adjustment reflects a more cautious approach, factoring in near-term challenges without dismissing RLI’s underlying strength. The message here was more about tempering expectations rather than a loss of confidence.
📊 Taking everything into account, the current analyst consensus on RLI is Hold. The average price target across firms now sits around $81.80, suggesting limited upside from current levels near $74. That said, RLI still commands respect from the analyst community due to its track record, even if sentiment is cooling off a bit.
These shifts signal a period of reevaluation. Analysts are trying to balance RLI’s long-standing consistency with evolving industry dynamics and the reality that valuations might need to reset slightly in light of new macro and sector-level pressures.
Earnings Report Summary
Fourth Quarter Results
RLI’s fourth quarter of 2024 wasn’t its strongest, but it wasn’t without a few positives either. The company reported net earnings of $40.9 million, or 44 cents per share. That’s a noticeable drop from the $114.6 million, or $1.24 per share, reported in the same quarter the year before. Operating earnings also slipped, landing at $38.4 million versus $71.1 million in Q4 of 2023.
One of the biggest setbacks in the quarter came from Hurricane Milton. The storm ended up costing the company roughly $42 million in underwriting losses. It was a punch to the gut, but nothing out of the ordinary for a property and casualty insurer. There was at least some cushion thanks to prior-year reserve releases, which added about $8.7 million back into the mix.
That said, not everything was heading in the wrong direction. Gross premiums written grew 9% during the quarter, and net investment income rose by 19%. Those are strong signs that the core business remains healthy, even when weather events shake things up.
Full-Year Performance
Looking at the bigger picture, RLI had a good year overall. Full-year net income reached $345.8 million, or $3.74 per share, up from $304.6 million and $3.31 per share in 2023. Operating earnings also moved higher to $265.5 million, or $2.87 per share.
Underwriting performance remained a standout, with a combined ratio of 86.2. That’s a solid number in the insurance world and speaks to the company’s discipline in managing risk. For context, anything below 100 typically means the company is writing policies profitably, and RLI continues to hit that mark year after year.
In December, RLI rewarded investors with a special cash dividend of $2.00 per share. That distribution returned nearly $184 million to shareholders. It’s the kind of move that shows management isn’t just focused on growing the business—they’re also committed to rewarding those who’ve stuck around.
Company Outlook
RLI’s leadership highlighted that 2024 marked the company’s 29th consecutive year of underwriting profit. That level of consistency doesn’t happen by accident. It’s a reflection of a business that sticks to what it knows, avoids unnecessary risks, and keeps a long-term mindset. Even with a bumpy quarter, that kind of track record keeps investor confidence steady.
Financial Health and Stability
If you’re a dividend investor, financial stability is non-negotiable. And this is where RLI really sets itself apart.
Debt is minimal. Just over $115 million on the books, practically offset by a cash pile of around $114 million. That means the company is operating from a position of strength, not dependency. Leverage is low, and the balance sheet is clean.
Return on equity is especially impressive at 23.56%, suggesting the company knows how to put capital to work. Free cash flow is massive, at $1.22 billion over the trailing twelve months. That kind of liquidity gives RLI the flexibility to invest, return capital to shareholders, or weather a tough year without skipping a beat.
While the current ratio is on the low side at 0.55, that’s not uncommon in the insurance world. What matters more is the company’s long history of meeting its obligations, managing claims risk effectively, and keeping reserves solid. On that front, RLI checks all the boxes.
Valuation and Stock Performance
RLI is not a bargain-bin stock by any means. It’s currently trading at about 20.7 times trailing earnings and 25.6 times forward earnings—levels that are on the high end for the sector. That might give some value hunters pause, but it’s not unusual for the market to assign a premium to quality and consistency.
Price-to-book is around 4.67, which might seem high unless you consider the company’s exceptional ROE and track record. Investors are clearly paying up for stability, and over the years, that’s been a smart move more often than not.
In terms of volatility, RLI is a dream. Its five-year beta is just 0.36, making it far less reactive to market swings. That kind of low-volatility profile is gold for dividend investors who want to sleep well at night, even during choppy market conditions.
Risks and Considerations
Every stock has its trade-offs, and RLI is no different.
The biggest knock from a dividend investor’s point of view is the low yield. If you’re building a portfolio purely for current income, you’ll need to pair RLI with higher-yield names to hit your target.
Valuation is another consideration. At current levels, the stock is priced for continued outperformance. That leaves little margin for error. If results start to slip, even slightly, the multiple could compress and put pressure on the share price.
There’s also the nature of the business itself. Insurance is tied to unpredictable factors like catastrophe losses and claims severity. While RLI has proven itself capable of managing these risks, no insurer is immune from bad years.
And while the dividend is safe, the growth rate is slow. Investors expecting rapid hikes may find themselves waiting a while.
Final Thoughts
RLI Corp. isn’t going to make headlines for huge dividend payouts. It’s not the highest-yielding stock in your screener, and it won’t be the most exciting ticker in your portfolio. But that’s the point.
This is a stock for the long haul—for investors who value financial strength, low volatility, and a management team that knows how to allocate capital wisely. The nearly five decades of dividend growth speak louder than any marketing campaign ever could.
With a conservative payout, rock-solid balance sheet, and a quiet but consistent approach to rewarding shareholders, RLI is the kind of company that may not thrill—but it sure can deliver over time. For those willing to look past the surface and think long term, RLI has a lot to offer.