Sure Dividend

Published on July 10th, 2025 by Felix Martinez

The Dividend Kings are a select group of stocks that have increased their dividends for at least 50 consecutive years.

We believe the Dividend Kings are among the highest-quality dividend growth stocks to buy and hold for the long term.

With this in mind, we created a full list of all the Dividend Kings.

You can download the full list, along with important financial metrics such as dividend yields and price-to-earnings ratios, by clicking the link below:

Click here to instantly download your free spreadsheet of all Dividend Kings now, along with important investing metrics.

RLI Corp. (RLI) is the newest member of the Dividend King list, having announced its 50th consecutive annual dividend increase on February 13th.

This article will provide an overview of the company’s business, its growth prospects, competitive advantages, and expected returns.

Business Overview

RLI Corp. is an insurance company that operates the following business units: Casualty (healthcare & transportation insurance), Property (fire, earthquake, difference in conditions, marine, etc.), and Surety (contract surety coverage, licenses, and bonds).

Source: Investor Presentation

RLI Corp is forecasted to see its earnings per share grow nicely this year, to $3.05 per share.

Growth Prospects

RLI Corp. has not consistently grown its profits in the past, as profits remained relatively stable for much of the last decade.

This is, in large part, because low interest rates reduced the income RLI can generate with its insurance float at times.

Since 2020, however, RLI Corp. has grown its earnings per share very nicely, with earnings per share rising by more than 100% between 2020 and 2024.

Higher interest rates enable RLI Corp. to deploy its insurance float in a more profitable manner; thus, a higher-rate environment is beneficial for the company, all else being equal.

Source: Investor Presentation

RLI has grown its premiums in recent years, and with further premium growth, RLI is expected to see its sales increase in the future.

We believe that a 3% annual earnings-per-share growth rate is a realistic long-term estimate, taking into account recent performance and the longer-term track record.

Competitive Advantages & Recession Performance

Many financial corporations, including some insurers, experienced significant difficulty during the Great Recession.

RLI remained profitable, and its earnings per share actually grew during the 2008-2010 time frame. We believe that RLI Corporation will be relatively stable during future recessions as well.

RLI Corporation has steadily increased its regular dividend over the years, a trend made possible by ongoing increases in the company’s payout ratio.

More recently, the dividend payout ratio has decreased again, and the dividend appears to be very sustainable for now.

During the Great Recession of 2008-2009, it steadily grew earnings-per-share each year during that time:

• 2008 earnings-per-share of $3.60
• 2009 earnings-per-share of $4.32 (20% increase)
• 2010 earnings-per-share of $6.00 (39% increase)

Valuation & Expected Total Returns

Based on expected 2025 earnings-per-share of $3.05, RLI stock trades for a forward P/E of 22.9. This is above our fair value estimate of 19, meaning shares appear overvalued.

RLI Corporation’s price-to-earnings multiple has fluctuated widely in the past. Shares were valued at a low double-digit price-to-earnings multiple shortly after the Great Recession; however, the company’s valuation multiple has since increased significantly.

RLI’s valuation remains elevated. We believe that shares are trading above their fair value and that multiple compression is likely to occur going forward.

For example, if the P/E multiple declines from 22.9 to 19 over the next five years, it would reduce shareholder returns by -2.5% per year over that time frame.

Aside from changes in the P/E multiple, RLI should also generate returns from earnings growth and dividends. A projection of expected returns is below:

• 3% earnings-per-share growth
• 0.9% dividend yield
• -2.5% multiple reversion

RLI pays a regular quarterly dividend and occasionally issues special dividends. For example, the company paid shareholders a special dividend of $4.00 per share in 2024 and a $2.00 special dividend in 2023.

However, since special dividends are irregular, we exclude them from our analysis and instead focus on the regular quarterly payouts.

In this scenario, RLI stock is projected to generate a negative total return of 1.4% per year over the next five years.

Final Thoughts

RLI Corporation is an insurance company that has generated solid operating results in recent years, with written premiums and investment income increasing at a steady pace.

Earnings are expected to continue growing over the next couple of years, albeit at a moderate pace.

RLI Corporation does not have a strong long-term track record, despite strong results in recent years, and the outlook for 2025 is also compelling.

However, we believe that shares are overvalued today. Due to this, RLI Corporation earns a “Hold” recommendation from Sure Dividend at its current valuation level.

Additional Reading

The following databases of stocks contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors.

• The Dividend Aristocrats List: S&P 500 stocks with 25+ years of dividend increases.
• The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
• The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
• The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
• The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
• The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
• The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
• The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
  Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500.
• The Dividend Contenders List: 10-24 consecutive years of dividend increases.
• The Dividend Challengers List: 5-9 consecutive years of dividend increases.
• The Best DRIP Stocks: The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.
• The High ROIC Stocks List: The top 10 stocks with high returns on invested capital.
• The High Beta Stocks List: The 100 stocks in the S&P 500 Index with the highest beta.
• The Low Beta Stocks List: The 100 stocks in the S&P 500 Index with the lowest beta.
• The Complete List of Russell 2000 Stocks
• The Complete List of NASDAQ-100 Stocks