Allstate Gains After Approving Share Buyback PlanAlexandria Baca
Allstate Corp., the largest publicly traded U.S. home and auto insurer, rallied the most in the 81-company Standard & Poor’s 500 Financials Index after authorizing the firm’s biggest stock buyback since 2006.
Allstate gained 3.2 percent to $53.47 at 4 p.m. in New York. The insurer has advanced 15 percent in the past year, compared with the 21 percent rally of the index.
The insurer approved the repurchase of as much as $2.5 billion in stock in the next 18 months, Northbrook, Illinois-based Allstate said yesterday in a statement. The company also increased its dividend 12 percent to 28 cents a share. Chief Executive Officer Tom Wilson has focused on improving margins from covering cars and homes after limiting risk tied to life insurance and savings products.
“We positively view the company’s efforts to narrow its focus on higher-return businesses and to aggressively manage its capital,” Clifford Gallant, an analyst at Nomura Holdings Inc., said today in a research note. He rates the company neutral.