Senior Property Casualty Insurance and Life Insurance Analyst here at Barclays. We're very pleased to have with us today, Tom Wilson, Chairman and CEO of The Allstate Corporation. We're also joined by Steve Shebik, Chief Financial Officer of Allstate. Allstate is one of the largest insurers of autos and homes in the U.S., and also has a life insurance and retirement savings business known as Allstate Financial. Allstate has generated much stronger results in recent years, and it's well on its way to exceeding its 13% return on equity goal outlined several years ago. Our format today will be with Tom Wilson providing some opening remarks, then I'll moderate a Q&A session. With that, it's my pleasure to turn it over to Tom Wilson.
Thank you, Jay. Good morning, everybody. Hope you're awake. My goal this morning is to help you understand Allstate's strategy and our proactive approach in creating shareholder value. I'll go through a few slides, and as Jay said, we'll sit up here and we'll talk about whatever you'd like to talk about. I'm joined today by Steve Shebik, who's our Chief Financial Officer, Stacy Sharpe, who's head of our corporate relations, and Pat Mastandrea, who runs all of our IR, who many of you know. Before I begin, let me give you the legal disclosure to this. No, it didn't work. Let's just see. We can't go anywhere unless the lawyers let us go. Can you advance that slide from back? While they're putting it up, what you will see is whatever I say can and should not be held against me.
We have a bunch of references to some non-GAAP stuff, and we, of course, have everything disclosed on our website. I can do it now. No, I cannot. Okay, hold on. You'll just have to give us a minute. We're still waking up. Our computer needs some coffee. Let me get started, and then we'll catch up with visuals in a few minutes. What we do, we think we have a unique and compelling investment opportunity for you. We're the largest publicly held personal lines insurer, as you know, in the United States. We have a broad set of products, and we sell them under three brands, the Allstate brand, the Esurance brand, and the Encompass brand. There are three components to the investor value proposition we're going to talk about today. First, differentiated strategy, second, attractive returns, and three, growth.
Attractive shareholder returns are generated primarily through a low volatility auto insurance business, and then a repositioned homeowners insurance business, which we've changed the way in which we go to market to adapt to increased severe weather. We're also very focused on increasing use of our shareholders' capital. We believe growth will be driven by focusing on unique customer value propositions for each segment, and I'll show you some information on that in just a minute, and by expanding our geographic reach and product offerings. Our operating and financial results are strong. That reflects good execution of our strategy and a proactive approach to dealing with external forces. Are we loaded yet? No. It's not working for me if it's working for you. Let me keep talking while they keep working. What I'm going to show you is how we segment the market.
We'll show you a graph, which we call it our Four Square. It is a way in which we split up the market. Personal lines customers fall into these segments. There are two vectors here. One is, do they want local advice or do they want to do it themselves? That is self-serve. The second vector is, do they believe that there is a difference between insurance companies? Do they value insurance? We call that brand sensitive. Then there are just people who are like, just give me a name that I recognize. Like I do not really care. All insurance companies are the same. We call that brand neutral. What I will do is show you how we attack that market. The Allstate brand is very focused on those people who want local advice, and believe in a branded product, which you would expect.
Our Esurance brand, which we bought in 2011, is focused on those people who want self-serve, want to do it themselves. They also believe in a branded product. Then there are customers who want local advice but do not really care who the company is. They are mostly served through independent agencies who have small offices around the country, and they represent a whole host of people from Travelers and The Hartford and everybody else. We compete in that segment with Encompass with a product targeted towards mass affluent. It would be easier if I could show you the graph. Are we yet working there? No. We compete in those in a variety of ways. In the Allstate business, we compete obviously you would expect with State Farm, Nationwide, and the other captive carriers.
Esurance competes mostly with GEICO and Progressive Direct. Encompass competes with Travelers and Progressive in the independent agent market. The reason we do that is we try to come up with a customer value proposition that best meets the needs of that customer group. For example, in the Allstate agency channel, we have sort of four or five sentences on each of those segments as to what we are doing for them. In the Allstate agency channel, we are seeking to give them a relationship and somebody who knows them, help them earn their hard-earned money. We have a series of words that we use to then drive our activity. Here we go. Okay, we are going to skip that.
Here you can see, Allstate is in the lower left, and you can see that is about half of the market, in the total property casualty market, and we are number two. That is where we compete with State Farm and others. You can see Esurance is about in the auto business, that is in that segment that controls about 25% of the market, less of the property business, and I will talk about that in a few minutes, and we are number seven. That business, we have grown it quite rapidly since we have bought it. Let me show you the science behind this because it is about bringing science to the other things we do. On the top of this slide shows it is based on market research. The customer segment is shown across the top, you can see local advice brand sensitive, that is where Allstate plays.
The competitors are shown down on the left. In green means you over-index in market share. That means your market share in that segment is greater than one times your market share in total. Sometimes it can be up to two times. Red means you have less than that relative share of that market. If you look at this, you say State Farm and Allstate obviously dominate in local advice and brand sensitive segment. Whereas you can see GEICO, Progressive, and Esurance have very little of that marketplace. Go all the way to the far right, and you look at the self-serve segments, and you can see GEICO, Progressive, and Esurance over-index in that segment by much greater than one. You can see that we have less of that, and that's just because of our size and scale.
We end up capturing some of that just because we advertise. If you go down to Travelers and Encompass, you can see this is where the independent agencies play. You can see in the brand neutral segment, Travelers and Encompass and the others compete there. This is about bringing analytics and precision to product design and service design, as well as bringing analytics to the way in which we price. Our strategy then is based on segmentation analytics and advanced technology. Our three underwriting brands continue to make changes in the segmentation. The Allstate brand, that means making them more of a trusted advisor to provide superior local advice and support. Esurance is utilizing technology and tools, and you can see how that would work with self-serve people. They want technology and tools. They don't necessarily want a person.
That helps make the customer service experience easier and faster than the competition. You may have seen our ads where we show, say seven and a half minutes is the new world versus 15, which is the old way in which customers were serviced in this segment. Encompass is highly focused on providing a packaged auto policy through independent agencies which serves mass affluent customers. Eventually, we'd like to figure out how to expand that from that relatively small niche. We have the capability to provide a broad range of products to each of these segments. That includes auto, homeowners, motorcycle, renters, condo, life insurance, roadside service, and a host of other brokered products through the Allstate agencies, which helps us strengthen those relationships. Esurance is also expanding into homeowners and other customer protection products which further leverages their acquisition costs.
If you spend $1 trying to advertise for self-serve, if you only sell auto insurance, that's one product. If you can sell auto and homeowner insurance, it obviously lowers your net acquisition cost per policy because you're selling more things on the same advertising dollar. We're also highly focused on keeping our costs low because while value needs to be driven by what they want, we also have to make sure in this is a relatively price-sensitive business, so you have to be focused on keeping your costs low. Our analytical capabilities have made us industry leaders in pricing, risk management, and claims, we continue to leverage and advance our capabilities against that strategy. I think I would say just quite simply, we're good at math.
Our use of advanced technology has enabled us to drive simplification and continuous improvement across our operations while taking advantage of human resources around the world to drive lower costs and better value for customers. We've also embarked on a strategy to create what we call an integrated digital enterprise, and that's combining data and technology to build new business models. For example, in our roadside business, we believe we can increase the service levels and lower our costs by building an integrated digital approach to the market. Advanced technology also works in a number of other places. We're in the market with a number of different telematics offerings in the Allstate Insurance brands, and actively investing in that area. As an investor in Allstate, you also get to participate in attractive returns.
These charts highlight the steady returns from auto insurance and the progress we've made to improve homeowner returns. The Allstate brand underlying combined ratio is shown in the chart on the upper hand right of this chart. That's for our auto business. You see it's performed in a tight zone over the past few years, and in fact, it's true if you go back 10 years, reflecting our expertise in auto pricing, risk management, and claim settlement. In the chart on the lower right-hand side, you can see the improvement in the homeowners' combined ratios over time. The underlying profitability of this line is improved. That underlying excludes catastrophes and prior year reserve releases. The top line, the blue line, shows what it is in total. You can see the gap between those two is still relatively high, but you can see that yellow line comes down.
That's improved our profitability. We did a whole bunch of things in terms of changing pricing and underwriting and redesigning the product. This line has generated $2.1 billion of underwriting profits over the last 24 months, despite $2.5 billion of catastrophes. Over the last 12 months, we've been building momentum and growth that reflects an expansion of local Allstate agencies, a smaller decline in the Allstate brand homeowner policies. To get that line to go down on the prior slide, we had to get smaller on the homeowners business, which impacted our growth for a couple of years. We're also expanding Esurance and rebuilding agency relationships with Encompass. Chart in the upper right-hand slide shows total property liability. You can see written premium policy growth comes from all three brands.
You can see we've moved up to 2% in terms of unit growth, and that brings premium growth 5.5%. The largest driver of that resurgence in growth is the Allstate brand, which you can see in the chart on the bottom right of the page. You can see that the homeowners, the blue is net written premium, the red is policies in force. That decline in the 2012 period is really driven by the homeowners business getting smaller, which both kept us from growing our auto business more, although the auto business was growing, and now that's starting to catch on and take off. We acquired Esurance in 2011 to enhance our customer value proposition in that self-serve segment.
That transaction further built out our strategy, which enabled us to compete more directly with GEICO and Progressive Direct, it also generated a number of economic benefits. Since the acquisition, the Esurance business has grown almost 70%, or $600 million in net written premium, and we've added 645,000 policies in force. That growth has been supported by the benefit of Allstate's ownership, which includes an expansion into the preferred risk. We're much better at pricing preferred risk than Esurance was. A geographic expansion, so we're up to 43 states from 30. Strengthening of the Esurance brand by repositioning the brand and putting more money behind it. We've also enhanced their ability to settle claims because we're quite good at both effectiveness and efficiency in claims. Further growth will come by expanding into the homeowners insurance business.
While I'm pleased with these results, there's still work to be done. We have some actions underway to improve the underlying loss ratio in this business. You can see it started to come down in 2014. That will bring growth down a little bit in this business, but it's still in the double-digit land. Esurance is an attractive business for us. Allstate represents an attractive opportunity. Our strategy is to provide a competitive, different segmentation, better analytics, and advanced technology. We have good returns in our auto business, our homeowner business. There is a platform for sustained growth now that we've gotten the business model adapted to severe weather. We stay focused on our priorities and proactively address issues and attack them head on. Then we're good at managing capital on behalf of our shareholders. With that, Jay, should we talk?
Great. We're going to transition to the fireside chat format. Tom, if you want to take the one in the middle. Also joined by Steve Shebik, Chief Financial Officer. Tom, thanks for that overview. One of the questions we often get about Allstate increasingly is on customer segmentation, particularly in auto insurance. Can you discuss the advancements that Allstate is making in customer segmentation, which essentially means making sure you're attracting and retaining the best and most profitable customers that are probably more likely to buy more than one product, and how that may compare to some of your competitors?
Sure. I'll go way up for a minute, then I'll come down. If you look at the basis of competition in the business, 15 years ago, it was about who had the best math, who had the most cells in their pricing model. We did quite well in that business, as did Progressive, and GEICO has a different way of approaching it, but it's worked well for them. Then it became not only did you have to be good at pricing, you had to be good at advertising. You saw the advertising get dialed way up. In 2007, we said, "You know, that game is going to play out again, so we need another way in which we can compete in addition to those two," that was being focused on the customer.
In 2010, we came up with our segmentation that I just showed, we used that to bring greater precision to the way in which we go to market, what we give our customers. The concept is the first one, are you right on the risk standpoint? I'll talk about that in a second. We're good at that. Second is, you got to make sure you're advertising to those people. The third is, give them exactly what they want, because if you give them exactly what they want, they'll pay you the most amount of money, and you'll get the most margin. That's worked well for us. That's why we bought Esurance. You're seeing other people adopt a similar approach to segmentation. Progressive talks about the Robinsons and Dianes. It's another way to segment the market. Everybody's got their own way.
There's no right way. Theirs is right for them. They're underrepresented in the Robinsons segment, which are people who have, I can't tell you exactly what they have in their segment, but it's people who own a house, got a couple of cars, pretty stable financially, a good risk. We are over-represented in that segment. That's the most profitable segment. One of the reasons we're over-represented in them is because they want local advice. The other reason is because they have homeowners. Their approach is to go after the Robinsons. Our approach is, we want the Robinsons no matter which category they're in. That's why we're adding homeowners to the Esurance product line, is because there are Robinsons who want self-serve, and we want to be able to help them self-serve, and we want them to have homeowners. We underwrite homeowners.
What we're really doing is taking homeowners from a problem for us to a competitive advantage in going in that and competing on that basis. The other thing we're doing on pricing today, which I think is interesting, is we've moved from cost-based pricing only to price sensitivity. When you have cost-based pricing, you're trying to slice and dice the customers as well as you can because you're making an estimate as to what their costs are. We're all very good at that. The industry got very good at it. What we've now done is put price sensitivity on top of that by customer group and factor in retention a little differently. That's helped us drive growth in the auto business. The next wave of that will be telematics.
If we're trying to determine what we charge you, Jay, we figure out what kind of car you drive, where you live, how financially responsible you are. There's a variety of things we look at and we come up with an estimate. If we can tell how you brake, how you turn, what time of day you're driving, a variety of things, we can give you an even more accurate price. That's where telematics will come in. It's every bit as powerful as credit. Those companies who are using it to price will continue to have an advantage in that first leg of competition, which is price sophistication.
Okay. Thank you. It's interesting in that we hear now from major competitors like Progressive and GEICO that they appear to be focused on moving into homeowners insurance as well, when historically they've been auto only. Is that a new competitive threat for Allstate? Oh, also into the exclusive agency channel, starting to put up storefronts.
Well, I think it's indicative of them trying to figure out how do they meet the needs of the customer. I would say, yeah, it's a competitive threat that they're coming. In the homeowners business, I'm like, "Come on in." We're good at it. We've spent a bunch of time getting better at it, and it's hard to do. It's hard to resolve the claims in an effective and efficient way. It's hard to actually underwrite a house. Underwriting a house is different than underwriting a car. If you have a 2010 Chevrolet Malibu, they all look alike. Not all three-bedroom brick ranch homes look alike. Some have good roofs, some have crappy roofs. You got a crappy roof that's exposed to the weather, and that's where most of your damage is.
You have to be able to decide how much you're going to charge for that house. It's more sophisticated than doing just auto business. Yes, they're headed there because they want the customers who have multiple products. It also helps you lower your marketing costs. Esurance has one way today they lower their marketing costs. With homeowners, it would be a second way. Esurance, we run Esurance ads. You call us. We sell you a product, which obviously is a good thing. If we don't sell you a product, we flip that to the upper right. We have a company up there called Answer Financial, and we broker over $600 million worth of product there, and we get a commission for somebody. We take our failed quotes and turn them into cash.
That gives us a lower cost to compete with GEICO and Progressive Direct. Even though we're not the same scale they are, and we need to get to better scale there, when we sell homeowners, there's another advantage because if I can sell 30% of my customers homeowners, then I spend $1 advertising, I sell you an auto policy, and 30% of them I sell something else. That also lowers your cost. They broker their business. Both Progressive and GEICO do not. They sell homeowners, but they sell somebody else's homeowners, which makes it more difficult to control the customer experience. Importantly, you don't get the underwriting profit, which used to be an underwriting loss. Today, we got it repositioned so it's an underwriting profit.
Okay. Staying on the homeowners trend, the chart you put up was very interesting because I think the underlying loss ratio in homeowners improved every quarter since the fourth quarter of 2009. What would you attribute that to, and can that trend persist?
I would attribute it to two things. One is need and economics. When we had a third of our cap open and business was losing a billion and a half dollars, you got to do something, and you got to do something fast. The second thing is what we actually did, was we had a comprehensive program in which we repositioned the business. Most people, and most of the people who look at our company from the outside, could see the most obvious part of that, which was raised price. We went from $800 a year per policy to over $1,100 a year policy in four years. Well over a 30% increase. That obviously helps because you're collecting more money. If you look at, though, I don't believe that's the complete driver.
I think a large portion of it was due to the way in which we underwrite the business.
I talked about, we inspected every house we had. Those houses that we thought were the most mispriced, the most at risk because the gutters were falling off or the stoops had broken bricks in them, and you could fall and hurt yourself. We reduced the size of that business by millions of policyholders. We kept what we thought were the best risk-return profile. If you look at us versus the competition, what you'd see is the competition raised prices on average about as much as we did over a five-year period. Our results are better, and that's because we put more precision into the risk management selection. Now we've redesigned to make sure that it's right going forward. We've redesigned a product, we call it Allstate House & Home. It age rates the roof.
If your roof is brand new, and a hailstorm comes and it gets destroyed, we give you a new one. If your roof is 30 years old and you've been hoping for that hailstorm to come so you didn't have to buy new shingles, we don't give you $1.00 on a dollar. We give you like $0.25 on the dollar. We tell customers that upfront. We communicate to them. We say, "Hey, if you want to go get, we will insure 100% of it, but it costs a whole lot more." We give them a choice. If they choose to take the lower cost policy, they know that we say, if you go get a new roof, your insurance will be less. Customers understand that relationship. That should make it sustainable going into the future. That's about 85% of our sales.
It's less than 20% of our total book of business now, that will be what keeps that engine going. I don't think it'll get a whole lot better because I don't think it needs to get a whole lot better. It shouldn't pop back up.
On the Allstate brand homeowners, we're now close to achieving target profitability, that positions it more for growth.
Yes. That's in total.
We run this business in a highly localized fashion. When we bring precision, it's by state, by ZIP code, by risk code. We split this thing into more ways than in many different ways. I would say in about 60% of the country, we're open to grow in the homeowners business. There are still some places where we've chosen not to grow, either because we don't like the mega catastrophe exposure, or we don't like the regulatory environment. For example, in California, we haven't written a new homeowners policy, I think in seven years.
Yeah. That's right.
Because we're not allowed to make an adequate return, so we're just not going to do it.
Turning to auto insurance, which is by far Allstate's largest business. When you look at the Allstate brand, the return profiles are high. The company is back to generating positive growth. Is that going to attract more competition, or do you still see a robust return on equity profile for that product?
Steve may have his view. I'll give you my view. The auto business is highly competitive and has been highly competitive for years. We do quite well there. Our growth came off in 2009 and 2010 on purpose, because we needed to make sure we made enough money there to fund the changes we need to do in the homeowner business when the weather got worse. Since then, we've expanded our risk profile, and gotten back into the pump, which is why you see the growth over 2% in units in that business now. I think it'll stay competitive. I think the base of the competition is again, is about pricing accuracy. It's about advertising, now it's about the customer value proposition. For us anyway, it's not just about the low price. I like to say to our team all the time, look, anybody can give it away.
Growing by reducing price is not what we get paid to do. What we get paid to do is take all three of those together and do well. Do you have any other views on that?
Overall, I think competition has been rational in the way people address market. As Tom's indicated, everybody has a little different pricing algorithm segmentation. It's not like you're head to head on an individual customer in terms of your algorithms. You have a different pricing, you have different spread of your pricing and your risks. To date, it's working pretty well the last several years.
I think that's a really good point. If you went back 20 years, and some people would say the auto business was cyclical.
Yeah.
Make a lot of money, cut price, lose money, raise price. It was. That's because we didn't really know. The industry has gotten so much more sophisticated.
Yeah.
I believe what we've done is we've turned it into a place where we're capable of managing that competition more precisely. That's for the top three companies-
Yeah
in profitability. If you look at our profitability, Progressive's and GEICO's, we all run in the mid-90s in auto business and have for a long time. There's a whole bunch of other people who aren't as sophisticated who don't do that well.
Yeah
Those are the people we're getting business from. They can't cut their price because they're getting about a 7% return on equity. The industry in total. We look at share of top line and share of profits. We'd like more of both, but if we have to get more of anything, a share of profits is better than share of top line.
Okay. Let's touch base on capital management before we turn it over to the audience response system. Allstate's become a cash generating machine, generating significant operating earnings and deploying that meaningfully to share buybacks and dividend increases. Could you give us an update in terms of your thoughts in terms of deploying excess capital?
On our core business, as you point out, we make pretty good operating income. We have to deploy part of that as part of growing the business. Insurance business requires set aside capital for each of your incremental revenue that you make. From an auto basis, we say kind of like $1 of capital for $3 of premium. Homeowners is something more like 1 to 1. You look at the growth that we show, I guess that's something inside that. That leaves you with a fair amount still of free cash flow to pay dividends, and we've been increasing our dividends the last several years.
Try to maintain it kind of within the confines of the competition that we've done, the remainder is available either to grow the business further, to make maybe acquisitions as we do with insurance, or potentially do stock buybacks as we've been doing more aggressively in the last three years.
Absent M&A opportunities, is it fair to say that annual operating earnings can be largely deployed into buybacks and dividends?
You have to subtract out the amount you need for growth, 5% plus hopefully, and you have to subtract out for dividends, right? That's freed up for us to look at other opportunities, which would include buybacks.
I would say we've gone beyond that. The other thing we've done in capital management is, first we sold Lincoln Benefit Life because we thought we could deploy the capital better, and that'll turn into probably share repurchases because Steve's working on a $2.5 billion program now. The other thing that Steve's team did was reposition the balance sheet. If you look at our bonds, we think they trade three notches better than our credit rating. That's because you put a couple billion dollars of preferred equity, a restructured balance sheet, because we just thought it was a unique time in the marketplace where people were willing to give us 6.5 plus or minus.
Yeah
Permanent equity capital, and we can use that. I guess I would just say, Jay, we're constantly looking at how do we best use the shareholders' money. It could be what we do with the balance sheet, what we do with whether we're in a business or out of a business. We've always shown an ability to give it back to shareholders if we don't have a good use for it.
Okay. Let's turn to the ARS. We can start the clock on this. Feel free to buzz in. If you currently don't own the shares of Allstate or happen to be underweight, what will cause you to change your mind? The main response, slightly over half, is a lower valuation. You can't really control that, but that's a high-class problem, right?
It's really cheap now. Look at the book value multiple. Look at its historical book value multiple. Look at our book value multiple to other people in the industry, it's still cheap.
It's interesting how other issues that may have been headwinds in the past in terms of growth, improving the underlying combined ratio, and rationalizing Allstate Financial were much lower on the scale.
Yeah, I think it's interesting. Obviously, this is the market. We are seeing more shareholders are interested in growth get into the stock. I don't think there's a huge amount of improvement that'll come in the combined ratio. We like where we're at in terms of the return on economic capital in our businesses, in the property liability business. We do need to figure out what we do with our annuity business. It's still not where we'd like it to be on a long-term basis, so we're investing a little differently there. That's another part of profitability we have work to do on.
Yes.
That doesn't attract a lot of investors.
Is that the variable annuity piece or fixed?
Variable annuities, we sold. We sold variable annuities in 2006, which was good timing. We got $600 million for it. You couldn't give it away today. We have two annuity businesses. We have a deferred annuity business, which is relatively short duration business. That is getting decent returns today. We have a longer-term payout annuity business, which has got 30, 40-year lives on it, structured settlements, people who are severely injured, we paid annuities to them for a lifetime. That business is, at best, a break even on economic capital. We're working to invest in longer term assets because what's happened is, as interest rates come down, we still got those liabilities. The portfolio rolls into low interest rates, it puts you underwater. Eventually, it'll come back.
We've chosen to say we're long term owners of the business, given that we're at the low point in the interest rate cycle. When rates come up, we'll reinvest, and that should increase margins. In the meantime, we're putting more money into alpha investments rather than beta investments, which means we're investing in things like timber and some real estate and other things which have higher long term returns. We don't have a need for liquidity in that line. These liabilities go out 30, 40 years, we can handle the ups and downs in the investment market.
Okay. Next question, please. Allstate has achieved its 13% return on equity goal. What's your confidence level in Allstate's ability to achieve a higher return on equity above 13% over the next several years? Folks appear to have medium confidence in that, 50% saying that's the case, just over a quarter, not as confident, roughly a similar amount saying they have high or very high confidence in that.
As soon as you get to 13, why can't you do 15? Look, we try to drive as high. If you look at what we're trying to do, we want profitability. ROE is incredibly important to us, and we want growth. Profitability is the first and most important thing to us. Growth is second. Growing at low ROEs is not a good plan. Growing at high ROE is obviously the best plan. We're trying to modulate between those. The trick for us is that the homeowners business, the market really hasn't gotten figured out yet exactly what that ROE looks like over a long period of time. We're working on what it is. We think we're good today if the weather stays where it is.
If the weather gets worse, the returns could come down in the short term. We have a business process set up so that it will adjust quickly, which was not the case seven or eight years ago. I think we're prepared to deliver. We're comfortable with where we're at in returns. We'd like to drive growth. We think that's what we're trying to head to right now.
Great. All right. Last question, please. How do you think about Allstate's share repurchase as the share price appreciates? Should they continue repurchasing shares, deploy more capital internally, apply that through dividends or acquisitions? 45% saying continue to repurchase shares, a third saying increase the dividends, a smaller amount saying deploy the capital internally to accelerate growth.
I think that's pretty much consistent with the way we think about it, which is given where the stock is, we still think the stock is a good value. We're out aggressively buying it back. The dividends, having gone through a couple of cycles in the share repurchases since I've been there, I still don't know how many since we've been together. I don't know how many billions we've bought back, maybe $20-plus billion worth of stock.
Yeah, more than 20. Yeah.
Some at high prices, some at low prices. You do have to think about what do you do when the stock gets fully valued. Is that the right thing to do? Sometimes people have increased dividends. Some people have gone to annual dividends, sort of a just pop it out special dividends so you're not buying the stock back. We're not at that place yet. We manage the dividend the way Steve's talked about, which is really looking at payout ratio yield and making sure we're competitive in the marketplace.
Right. With the stock at around 10 times forward earnings, it certainly doesn't seem expensive from our perspective. Excellent. Please join me in thanking Tom Wilson and Steve Shebik.
Thank you, Jay.
Thank you, Jay.