In an effort to share more profits with the shareholders,
) - commonly known as Sallie Mae - announced a 20% hike in its
quarterly cash dividend to 15 cents per share. The newly
increased dividend will be paid on Mar 15, 2013 to the
shareholders of record at the close of business as of Mar 1.
Concurrently, the board of directors at Sallie Mae authorized
a $400 million share repurchase program for its outstanding
common shares. The program does not have any expiry date.
The dividend hike as well as the new share repurchase program
is supported by Sallie Mae's strong balance sheet along with its
ability to generate significant cash flows. For the fourth
quarter of 2012, the company reported earnings of 55 cents per
share, a couple of cents ahead of the Zacks Consensus Estimate
and 8% higher than the year-ago quarter. Results were boosted by
higher debt repurchase gains. As of Dec 31, 2012, cash and
investments stood at $5.0 billion compared with $3.9 billion as
of Dec 31, 2011.
Also, during 2012, the company repurchased 58 million shares
worth $900 million.
The latest dividend hike reflects Sallie Mae's commitment to
provide value to its shareholders. Through this dividend payout,
the company will also be able to attract investors, who are
increasingly searching for high-quality dividend paying stocks in
an effort to boost their income. This, in turn, will enhance
investors' confidence in the stock.
Sallie Mae currently retains a Zacks Rank #4 (Sell). Other
banks that are performing well include
Fifth Third Bancorp
Regions Financial Corp.
). BankUnited carries a Zacks Rank #1 (Strong Buy) and the other
two hold a Zacks Rank #2 (Buy).
BANKUNITED INC (BKU): Free Stock Analysis
FIFTH THIRD BK (FITB): Free Stock Analysis
REGIONS FINL CP (RF): Free Stock Analysis
SLM CORP (SLM): Free Stock Analysis Report
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