Ameriprise Financial, Inc. AMP announced additional share buyback plan. The company’s board of directors has authorized additional share repurchases worth $2.5 billion, through Sep 30, 2022.
It intends to use existing working capital, future earnings and other customary financing methods to fund the repurchases.
The buyback plan does not require the company to purchase any minimum number of shares. Depending on market conditions and other factors, the repurchases may be commenced or suspended at any time without prior notice.
Acquisitions under the repurchase plan may be made in the open market, through privately negotiated transactions or block trades or other means.
Ameriprise has been consistently boosting shareholders’ value through efficient capital deployments.
In February 2019, the company had announced additional repurchases worth $2.5 billion, which will expire in March 2021. As of Jun 30, 2020, $473 million worth of shares were left to be repurchased under this plan.
In mid-March, Ameriprise had suspended buybacks amid the coronavirus-led concerns, but resumed the same in May.
In fact, apart from share repurchases, the company has been paying regular quarterly dividends. It also hikes dividends at regular intervals. In May 2020, the company announced a dividend hike for the 13th time since 2010.
Ameriprise’s financials are supported by a strong balance sheet. As of Jun 30, 2020, the company had total debt worth $4.52 billion, lower than the cash & cash equivalents balance of $7.70 billion. While its total debt to total capital of 39.9% increased sequentially in second-quarter 2020, the same has been witnessing a declining trend since the past few quarters.
Given a strong balance sheet position, a dividend payout ratio lower than the industry and decent earnings growth, the company is expected to be able to sustain efficient capital deployments in the future.
Shares of Ameriprise have lost 9.7% so far this year compared with a decline of 6.2% recorded by the industry.
Currently, Ameriprise carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
New Share Buyback Plans by Other Companies
Over the last few weeks, several firms including Home Bancorp, Inc. HBCP, HarborOne Bancorp, Inc. HONE and Columbia Financial, Inc. CLBK have announced new share repurchase authorizations. Home Bancorp’s board of directors approved the repurchase of up to 444,000 shares of the company’s common stock.
HarborOne Bancorp’s board of directors adopted a share repurchase program, which authorized buyback of up to 2.92 million shares, while Columbia Financial announced authorization to repurchase up to about 5 million shares.
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