10 Best GARP Stocks That Pay Dividends

7. Chubb Limited (NYSE:CB)

Number of Hedge Fund Holders: 51

Chubb Limited (NYSE:CB) ranks seventh on our list of the best GARP stocks that pay dividends. The multinational insurance company offers a wide range of insurance products, including property and casualty, life insurance, and reinsurance.

Chubb Limited (NYSE:CB) has delivered consistent growth over the years. Between 2016 and 2023, the company achieved a compound annual growth rate (CAGR) of 7% in revenue, while its earnings per share grew at a CAGR of 14%. This steady expansion persisted despite challenges such as the pandemic, geopolitical tensions, inflation, and rising interest rates that disrupted the broader economy. A key factor behind this resilience is that most customers are unlikely to cancel their insurance policies just to cut costs. While economic downturns can temporarily limit pricing power, leading insurers are typically able to withstand such short-term pressures.

That said, Chubb Limited (NYSE:CB) is experiencing a setback due to recent wildfire losses, which are expected to reduce free cash flow by $1.5 billion. However, it has a strong track record of handling significant losses, including those from Hurricane Ian and Hurricane Milton, demonstrating its ability to effectively manage such challenges.

In addition, Chubb Limited (NYSE:CB) has a solid cash position, generating $4.57 billion in operating cash flow. The company also returned about $1.1 billion to shareholders through dividends and share repurchases. It stands out as one of the top dividend stocks, having consistently increased its payouts for 31 consecutive years. Currently, it pays a quarterly dividend of $0.91 per share and has a dividend yield of 1.38%, as of February 14.