American International Group Inc (AIG), Discover Financial Services (DFS), The Chubb Corporation (CB): Three Financial Firms Gobbling Up Shares

The Chubb Corporation (NYSE:CB)’s repurchases were temporarily halted in 2012 after uncertainty from Hurricane Sandy. In 2013, the company authorized a new $1.3 billion repurchase program which would cut share count by 5.5% if all shares were purchased at the current price.

Thirteen times forward earnings estimates is a good price to pay for this quality property and casualty insurer. Investors pay a premium for The Chubb Corporation (NYSE:CB) at 1.4 times book, but capital allocation rewards shareholders in the long-run. Chubb has cut its share count by 36% since share count peaked in 2006.

Why buybacks?

Every share repurchase increases a stockholder’s ownership in a company and his or her claim to its profits. Companies that have consistently repurchased shares have trounced the overall market, achieving much higher returns on capital. Seek out high-quality companies that can persist for the long-run and repurchase shares year after year. They will undoubtedly lead the market.

The article 3 Financial Firms Gobbling up Shares originally appeared on Fool.com.

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