) enhanced its quarterly common stock dividend by 13% to 17 cents
per share. The dividend will be paid on Apr 1, 2013 to
shareholders of record as of Mar 15, 2013.
This reflects the company's commitment to return value to
shareholders with its strong cash generation capabilities. Prior
to this, the company increased its dividend by 50% (from 10 cents
to 15 cents per share) in Apr 2012.
The dividend increase is part of Comerica's 2012 Capital Plan.
The company's capital plan including dividend increase and other
capital actions were submitted to the Federal Reserve in Jan
2012. The Fed did not object to its capital plan and therefore,
the company increased its quarterly dividend.
In 2012, the company repurchased 10.1 million shares and combined
with dividend payments, returned 79% of full-year 2012 net income
to shareholders. Cash and due from banks exiting the year were
Going forward, we believe that continuous geographic
diversification beyond the company's traditional and
slower-growing Midwest markets could drive growth over the next
cycle. Revenue synergies from the Sterling acquisition should
accelerate its top-line growth. Capital deployment efforts also
inspire investors' confidence in the stock.
We believe that the company's current capital position allows
sufficient scope for further capital deployment. Yet, its
significant exposure to riskier areas such as commercial real
estate markets, unsettled economic environment and regulatory
issues are looming concerns.
Comerica currently carries a Zacks Rank #3 (Hold). We believe the
announcement of a dividend increase will augur well for the
company and help boost shareholders' confidence, which might lead
to positive estimate revisions. This, in turn, could cause an
upgrade in the Zacks Rank.
Among other companies in the same sector,
Wells Fargo & Company
) recently increased their capital deploying efforts through
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