AIG Extends Rally on Dividend SpeculationZachary Tracer
American International Group Inc., the insurer that repaid a U.S. bailout last year, posted its best two-day gain since June in New York trading on speculation the company may resume dividend payments.
AIG climbed 98 cents, or 2.4 percent, to $41.60 at 4 p.m. The New York-based insurer has rallied 7.7 percent in the past two days.
MetLife Inc., the largest U.S. life insurer, raised its quarterly payout yesterday for the first time since 2007, after the company limited Federal Reserve capital oversight by selling its banking assets. AIG stopped paying a dividend in 2008, the year it took a U.S. government rescue as mortgage-related losses drained capital.
“We expect a small dividend could be reinstated in 2013” by AIG, Jay Gelb, an analyst at Barclays Plc, said in a note to investors yesterday after MetLife’s announcement.
AIG Chief Executive Officer Robert Benmosche has been paying down debt to cut interest expenses as he works to improve the company’s credit rating.
“As the year progresses, we will then begin to look at things like ‘Could we add a dividend to the stock and also could we have some kind of modest stock buyback?’” Benmosche said in a Feb. 22 conference call. “But we’re going to wait until we’re very, very sure we’re in great shape.”
MetLife climbed 1.5 percent to $38.32 after surging 5.5 percent yesterday.