In an effort to boost its shareholder value, the board of
Heartland Payment Systems
), approved a new share buyback program. As per the
authorization, the company will be able to repurchase up to $75
million worth of shares through open market or privately
HEARTLAND PAYMT (HPY): Free Stock Analysis
LENDER PROC SVC (LPS): Free Stock Analysis
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This new program has been authorized due to the expiration of the
previous $50 million buyback program and is effective
immediately. Under its previous authorization, Heartland
purchased approximately 1.7 million shares at an average share
price of $29.98.
Heartland's financial strength allows it to continue with its
buyback program. As of Mar 31, 2013, cash and cash equivalents of
the company stood at $37.5 million. The company also expects to
generate and utilize strong cash flow to enhance shareholder
worth through repurchases. Heartland used $14.3 million of
operating cash during the first quarter of 2013 to buyback
approximately 0.5 million shares, taking the tally to $150
million worth of shares repurchased in the last 18 months.
Heartland expects to deliver operating earnings per share in a
range of $1.92-$1.96 for full year 2013. We believe that the
share repurchases will help it achieve the guided range. The
Zacks Consensus Estimates for 2013 is currently pegged at $1.99,
higher than the company's guidance and also representing a 20.5%
Additionally, the company declared a quarterly dividend of 7
cents per share payable on Jun 15, 2013 to shareholders of record
as of May 24, 2013. Heartland has maintained a steady dividend
payout, including a $2.6 million paid in the first quarter of
The company continues to focus on improving revenue, expanding
margins and fortifying its capital structure, which helped it
deliver solid results in the first three months of 2013.
However, no earnings momentum has been witnessed over the last 7
days. We expect the news of the new buyback authorization will
encourage analysts to pull up their estimates.
Among others who sought to increase shareholders' confidence,
Lender Processing Services, Inc.
) authorized a $100 million share repurchase program to purchase
common stock over a period of time through the open market or
negotiated transactions in Feb 2013. The company intends to
complete the share repurchase program by Jun 30, 2014.
Heartland currently carries a Zacks Rank #3 (Hold). Among others
in the industry,
Official Payment Holdings Inc.
) carries a favorable Zacks Rank #1 (Strong Buy) and
) carries a Zacks Rank #2 (Buy).