In an effort to boost its shareholder value,
), has recently completed its share buyback program that was
announced last month.
On Sep 17, 2013, the board of directors of Aegon had announced
the share buyback program, where they declared its intention to
buy nearly 19 million shares to neutralize the dilutive effect of
the 2013 interim dividend paid in shares. Nearly 55% of the
shareholders had elected to receive the cash dividend and the
remaining 45% elected for the stock dividend. Subsequently,
nearly 19.05 million shares were issued on Sep 13, 2013.
Aegon has repurchased all of these shares between Sep 17, 2013
and Oct 14, 2013 for EUR 5.6233 ($4.2) per share or an aggregate
price of EUR 107.1 million ($79.1 million).
Aegon's financial strength allowed it to fund its buyback
program. As of Jun 30, 2013, operational free cash flow of the
company stood at EUR 674 million ($518 million). Aegon expects to
achieve operational free cash flows between EUR 1.3 billion and
EUR1.6 billion by 2015. We believe realizing this goal would help
Aegon to further engage in share repurchases or pay regular
dividends thereby retaining investor confidence as well as
attracting new investors.
Being positioned to capitalize on the rising interest rates and
recent developments in the U.S., Aegon expects to create further
long-term value for its shareholders. We believe that this share
repurchase will help Aegon to achieve its desired goal. The
company continues to focus on improving revenue, expanding
margins and fortifying its capital structure.
However, no earnings momentum has been witnessed over the last 7
days. We expect the favorable development will encourage analysts
to pull up their estimates, exerting upward pressure on the Zacks
However, in a low interest rate environment Aegon's underlying
earnings and Return on Equity (ROE) had been a drag. Thus we
currently have a Zacks Rank #4 (Sell) on the stock. Among others
in the financial services space,
FBL Financial Group Inc.
) carry a favorable Zacks Rank #1 (Strong Buy) while
American International Group Inc.
) carry a Zacks Rank #2 (Buy) and appear impressive.
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