Recently, the board of
American Express Company
) authorized a new share buyback program for 150 million shares.
The new program replaces the earlier 150 million share repurchase
program, which had 70 million shares available for buyback.
Concurrently, American Express also declared a quarterly
dividend of 20 cents per share, payable on May 10 to shareholders
of record as of Apr 5.
The new repurchase authorization is in compliance with
American Express' capital distribution plans approved by the
Federal Reserve earlier this month. The Federal Reserve approved
the company's capital plan for the next one year, giving consent
to hike its dividend by 15% to 23 cents per share from the second
quarter of 2013 and buyback shares worth $3.2 billion in the last
three quarters of 2013 and another $1.0 billion in the first
quarter of 2014.
American Express' received the approval in its second attempt.
The first capital plan was rejected in January as it was
adversely impacting the company's capital ratios.
In the initial plan, the company had proposed to repurchase up
to $4.7 billion of stock in 2013. However, the Federal Reserve
disapproved and authorized a lower share buyback as it was
contracting American Express' Tier 1 ratios to 4.97% - below the
minimum requirement of 5% - in one of the quarters.
American Express currently carries a Zacks Rank #3 (Hold).
Some companies worth considering in the financial sector are
Euronet Worldwide Inc.
SS&C Technologies Holdings, Inc.
). All these companies carry a Zacks Rank #1 (Strong Buy).
AMER EXPRESS CO (AXP): Free Stock Analysis
EURONET WORLDWD (EEFT): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
SS&C TECHNOLOGS (SSNC): Free Stock Analysis
To read this article on Zacks.com click here.