On Thursday, KBW Inc. ( KBW )
announced a special cash dividend of $2.00 per share for its
shareholders. This dividend will be paid on December 17, 2012 to
shareholders of record as of December 10, 2012.
The special dividend announcement follows the proposed strategic
merger of KBW with Stifel Financial Corp. ( SF ),
announced earlier in November 2012. Under the terms of the deal,
the cash part of the merger payment will be lowered by special
dividend amount.
During the announcement of the merger, shareholders of KBW were
stipulated to get $17.50 per share, which included $10.00 per share
in cash and $7.50 per share in Stifel common stock. Therefore, the
cash portion of the merger payment now stands at $8.00 per
share.
Despite sluggish third-quarter results, the company has a
significant long-term upside potential. Considering its disciplined
expense management initiatives, strong capital ratios and a healthy
balance sheet, it can be said that KBW remains poised for long-term
growth.
Further, the company's regular capital deployment activities
enhance investors' confidence in the stock. The company declared a
cash dividend on the third quarter of 5 cents per share of its
outstanding common stock. The dividend will be paid on December 14,
2012 to shareholders of record on December 5, 2012.
However, a sluggish macroeconomic environment remains a cause
for concern.
Among others, Franklin Resources Inc. ( BEN )
announced a special cash dividend of $3.00 per share for its
shareholders, earlier this month. This dividend will be paid on
December 20, 2012, to shareholders of record as of December 6. The
dividend announcement is part of Franklin's long-term strategy to
enhance shareholder value through planned capital management. The
strategy also includes investment in profitable businesses while
sustaining financial stability and flexibility.
KBW currently retains a Zacks #4 Rank, which translates into a
short-term Sell rating. We believe the announcement of special
dividend is an appropriate step taken by the company to boost
shareholders' confidence, which might lead to positive estimate
revisions. This in turn, could cause an improvement in the Zacks
Rank.
FRANKLIN RESOUR (BEN): Free Stock Analysis
ReportKBW INC (KBW): Free Stock Analysis ReportSTIFEL FINL (SF): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
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