People's United Financial Inc.
) announced that its Board of Directors has approved a new stock
This share buyback program upholds the company's trend of
returning wealth to its shareholders. Under the new share
repurchase authorization, 10% of the company's outstanding common
stock - totaling 33.6 million shares - can be repurchased.
The shares will be bought through open market either through
agents or directly. However, the time of repurchase as well as
the terms and conditions of the program will be at management's
Further, the share repurchases will be funded with the proceeds
of debt financings and the available cash. Yet, the debt
financings and share repurchase actions will be taken based on
the market conditions.
Earlier in the current quarter, People's United successfully
completed its previous share repurchase program, announced in
October 2011. The company bought back 18 million shares at a
weighted average price of $12.08 per share since the
announcement. Further, for the nine months ending September 30,
2012, People's United paid a total dividend of $164.3 million on
its common stock.
Moreover, over the last five years, People's United has returned
roughly $1.8 billion to the shareholders through share
repurchases and dividends.
The announcement of the new program depicts the company's strong
fundamentals, reflecting healthy capital levels, low risk
business model and future growth prospects. Management aims to
continue with the ongoing capital deployment activities through
consistent share buybacks and dividend payments along with
At the same time, this initiative would help the company reduce
share count, thereby increasing earnings per share and return on
equity. Moreover, it is also expected to boost investors'
confidence in the stock.
Earlier this month,
Fifth Third Bancorp
) has inked a deal to buy back about $125 million of its
outstanding common stock. The share repurchase deal reached with
Credit Suisse International, a division of
Credit Suisse Group
), is part of its capital plan that got the Federal Reserve's nod
in August this year and encompasses the repurchase of 100 million
As per the agreement terms, Fifth Third will pay $125 million
to Credit Suisse on November 9, 2012 and anticipates to receive a
significant number of shares then. However, the final settlement
for the actual number of shares that Fifth Third would receive is
likely to occur on or before February 7, 2013.
CREDIT SUISSE (CS): Free Stock Analysis
FIFTH THIRD BK (FITB): Free Stock Analysis
PEOPLES UTD FIN (PBCT): Free Stock Analysis
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People's United currently carries a Zacks #3 Rank, which
translates into a short-term Hold rating. Further, we believe
that capital deployment activities will boost its competitive
edge. These factors may ultimately result in upward estimate
revisions, thereby leading to an improved Zacks Rank.