CIT Group Inc.
) recently announced that its board of directors has approved of
a $300 million share buyback program. The shares can be
repurchased till Dec 31, 2014.
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Additionally, CIT Group got an extension of the time period to
repurchase shares worth $7 million left from its 2013 share
buyback program. The company, after the termination of its
agreement with FRBNY (which restrained it from deploying capital
without prior approval) in May 2013, announced a $200 million
share buyback program. At the end of 2013, the company was able
to repurchase $193 million shares.
Besides the share buyback programs, CIT Group reinstated its
quarterly dividend of 10 cents per share in Oct 2013. The
dividend will be paid on Feb 28, 2014 to shareholders of record
as of Feb 14, 2014. Given the company's stable capital position,
we believe that it will continue to enhance shareholder value.
Apart from the capital deployment plans, we believe CIT Group's
efforts to lower its debt burden by either eliminating or
refinancing high-cost, long-term debt will work in favor of the
company. This action will lower funding costs and will aid in
margin growth. Also, a steadily improving global economy and an
advancing domestic market will boost demand for financing of
inventories and capital equipments, considered to be favorable
for CIT Group.
The Zacks Consensus Estimate for CIT Group currently stands at
$3.57 for 2013 and $4.10 for 2014, reflecting year-over-year
growth of 221.1% and 14.8%, respectively. The company is
scheduled to release its 2013 financial results on Jan 28, 2014.
CIT Group currently has a $9.9 billion market capitalization. The
stock currently has a Zacks Rank #2 (Buy). Other stocks to watch
out for in the industry are
American Express Co.
Financial Engines, Inc.
Portfolio Recovery Associates Inc.
). All these companies carry the same Zacks Rank as CIT