Wednesday 20 July 2011

HYP Watch List: Beazley (BEZ)

I'm always on the lookout for good new dividend-paying shares for my HYP portfolio (Level 6 on the DIY Income Investor Income Pyramid). 

Beazley is a non-life insurer that last year put in a strong underwriting performance and was able to pay a special dividend on top of its full year dividend. The dividend yield (historic and forecast, in late July 2010) is over 6%, according to Morning Star.

I already own a couple of insurers: Aviva (life and general consumer insurance), Catlin (property and casualty insurance) and Chesnara (life assurance - mainly closed funds).

Beazley was recommended recently by Investors Chronicle as one of its  'Six safe high-yielding shares' - it has the highest yield of the six shares identified. (AstraZeneca was another of the tips - a recent buy for DIY Income Investor.)

IC noted that "Beazley is a solid bet in the non-life insurance sector but falling premiums have cast a shadow over the shares, and it is proving tough for the group to impress the market very much in such an environment. However, it looks like there is value on offer. (...) The shares are priced at about estimated net tangible assets, which is not challenging. Plus there is the potential for upside if large claims start to send premiums north."

Motley Fool carried an article in January 2010 with an analysis of the company - all generally positive, noting that: "Beazley comprises a group of global, specialist insurance businesses with operations in the UK, US, France, Germany, Ireland, Singapore, Hong Kong and Australia. The company manages four Lloyd's syndicates underwriting insurance and reinsurance business in accident and health, life, marine, high value property and other areas."

So - all-in-all - if I didn't hold Catlin, I would be interested but, as I need to keep my sectors diversified, I think I will hold off for now.

Does anyone have any strong views about this one?

I am not a financial advisor and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

1 comment:

  1. I hold Catlin and a little Beazley. I may consider buying some when the results are out of the way.