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M&T Bank Rewards Shareholders With Additional Share Buyback

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M&T Bank Corporation (MTB - Free Report) remains on track with its commitment to enhance shareholders’ value through impressive capital deployment activities. It announced an additional share buyback program of up to $745 million.

The bank plans to make these repurchases either in open market or through privately negotiated transactions by Jun 30, 2018. The plan comes in addition to the $900 million of authorized buyback capacity that M&T Bank had announced under its 2017 Capital Plan. Last year, from July to December, the company repurchased common stock of about $449 million.

M&T Bank also announced first-quarter cash dividend of 75 cents per share, which will be paid on Mar 30, 2018 to shareholders on record as of Mar 5, 2018.

In February 2017, the common stock dividend was raised 7%. Notably, M&T Bank plans to increase dividend around 5 cents per share to 80 cents in second-quarter 2018.

Driven by a healthy liquidity position, the New York-based lender remains well poised to increase shareholders’ wealth through dividend payments and share buybacks. As of Dec 31, 2017, cash and cash equivalents along with investments were $19.5 billion, up 24% on a year- over-year basis.

Further, we believe that M&T Bank’s capital deployment activities are sustainable as its debt/equity ratio compares favorably with its peers.

However, efficient capital deployment activities are not the only factor that makes this Zacks Rank #1 (Strong Buy) stock an attractive pick now. Its latest earnings release reflected underlying strength and its ability to continue undertaking growth strategies.

Moreover, improving economic backdrop in the domestic economy on the back of lower tax rates and rising interest rates have made the analysts optimistic about M&T Bank’s future performance. The Zacks Consensus Estimate for earnings for 2018 and 2019 has been raised 1% and 1.4% upward, over the last 30 days.

Shares of M&T Bank have gained 25.9% over the past six months, outperforming the 19.7% growth for the industry it belongs to.

Some other stocks worth considering in the same space are The PNC Financial Services Group (PNC - Free Report) , State Street Corporation (STT - Free Report) and Northern Trust Corporation (NTRS - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for PNC Financial has moved up 1.3% for the current year, in the last 30 days. The company’s share price has increased 25.9% in the past year.

State Street has witnessed 5.1% upward earnings estimate revision for 2018, in the last 30 days. Its share price has risen 30.2% in the past year.

Northern Trust’s shares have gained 20.1% in a year and its earnings estimates for 2018 have moved up 2.7% in the last 30 days.

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