) shares rose 1.9% as the company regained investors' confidence by
announcing a 50% increase in its quarterly cash dividend. With
this, the company's new dividend stands at 7.5 cents per common
Shares of BancorpSouth had plunged 10.7% following its
second-quarter earnings release. Though the company reported
improved earnings, investors lost conviction in the stock due to
delayed mergers as well as weak mortgage market which may hinder
profitability of the company going forward.
The new dividend will be paid on Oct 1, 2014 to shareholders of
record as of Sep 15. Notably, prior to this, BancorpSouth had
raised its dividend in Aug 2013 to 5 cents per common share from 1
BancorpSouth's focus on organic and inorganic activities as well as
its strong capital position is commendable. However, lack of
improvement in the mortgage market and the rampant strict
regulatory backdrop are keeping investors wary.
If the postponed mergers are successfully completed and the company
continues to show growth in the top line in spite of the prevailing
low interest environment, it can turn things around in its favor
and regain investors' confidence.
A Sneak Peek into Recent Earnings
BancorpSouth's second-quarter 2014 earnings per share came in at 33
cents, in line with the Zacks Consensus Estimate. However, earnings
compared favorably with the prior-year quarter figure of 29 cents.
BancorpSouth Q2 Earnings In-Line with Estimates,
Currently, BancorpSouth carries a Zacks Rank #4 (Sell).
Dividend Hikes by Other Banks
In June, Washington Federal Inc. (
) announced a 10.0% increase in its quarterly common stock dividend
to 11 cents per share while Fifth Third Bancorp (
) declared an 8.3% rise in its quarterly cash dividend to 13 cents
per common share. Additionally, U.S. Bancorp (
) enhanced its quarterly common stock dividend by 6.5% to 24.5
cents per share.
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WASH FEDL INC (WAFD): Free Stock Analysis
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