An insurance company can generate tons of cash. Just ask Warren Buffett; he built Berkshire Hathaway on the shoulders of insurance businesses. If you're unfamiliar with how this works, here's a very simplified version, using car insurance as our example: 1. You buy a car insurance policy and pay monthly premiums to your insurer. 2. The insurance company takes that money -- called the float -- and invests it. 3. If you get in an accident, the insurance company pays your claim. If you don't, it keeps your money and continues to invest it.
The investments that companies make with this money are incredibly important. In some cases, a company may pay out more in claims than it brings in on premiums -- but in the end, it's OK because the company invested the money wisely in the interim. These investments allow cash to build up over the years, which usually makes insurance stocks ripe for dividend payments.
Source: Motley Fool
Related Articles:
- 12 Industrial Strength Dividend Stocks
- 10 Financial Services Dividend Stocks To Boost Your Yield
- Building Yield: 15 Consumer Goods Dividend Stocks
- 10 Higher Yield Dividend Stocks
- Who Owns The Top Dividend Stocks?
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Dividend Growth Stocks News
~
Popular Posts Last 30 Days
-
If you're worried about inflation rearing its ugly head next year, you should probably worry about more likely catastrophes, such as bei...
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
We screened our 24/7 Wall St. dividend equity research database and found 5 stocks that combined can generate over $3,000 of annual passive ...
-
The stock market has been on an upward path of late, with some of the most prominent stocks hitting astronomical highs. The dividend yield o...
-
My top financial goal is to eventually become financially independent. The foundation of my strategy is to make investments that produce an ...
-
Dividend growth stocks can be incredibly attractive investments if you crave recurring income. As these types of stocks raise their dividend...
-
In my opinion, there are three criteria investors should consider when evaluating a particular stock for their portfolio. The first is histo...
-
Dividends can be a tremendously powerful part of your investing strategy. Not only can they give you a continuing source of cash to reinvest...
-
In this article, we discuss 5 best March dividend stocks to buy. If you want to read our detailed analysis of dividend capture strategy and ...
-
As the broader stock rally broadens to some of the more “boring” corners of the market, it’s the higher-yielding dividend plays that could s...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.