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Cathay General Bancorp (CATY) Up 1.6% on New Share Buyback Plan
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Shares of Cathay General Bancorp (CATY - Free Report) have rallied 1.6% in response to the new share buyback program announced last week. The company’s board of directors authorized the repurchase of up to $125 million worth of shares. The program has no expiration date.
As of Sep 2, 2021, Cathay General Bancorp had nearly 77.9 million shares outstanding.
The current plan has been unveiled following the completion of the earlier buyback authorization in August. This program, announced in April 2021, had authorization to repurchase $75 million worth of shares. Under the program, Cathay General Bancorp had repurchased more than 1.8 million shares at an average price of $40.93.
Prior to this, Cathay General Bancorp had a buyback program that was completed in December last year. Under it, the bank had repurchased more than 1.5 million shares at an average price of $32.43.
In addition to the buyback program, Cathay General Bancorp pays regular quarterly dividends. The company has been paying dividend of 31 cents per share since November 2018, marking an increase of 29.2% from prior payout of 24 cents.
Considering the last day’s closing price of $39.79, the company’s dividend yield currently stands at 3.12%. This yield is not only attractive to income investors but also represents a steady income stream. The yield is impressive compared with the industry’s average of 1.81%.
Cathay General Bancorp has a solid balance sheet and liquidity position. As of Jun 30, 2021, the company had total debt worth $162.4 million (with the majority being long term in nature), and cash and due from banks totaled $133.5 million. Its times interest earned of 37.7 and total debt/total capital of 6.2% at the end of second-quarter 2021 improved sequentially.
Given the earning strength and decent liquidity position, Cathay General Bancorp will likely be able to sustain the current level of capital deployments and continue enhancing shareholder value. However, low interest rates remain a major near-term concern.
Shares of Cathay General Bancorp have rallied 58.9% over the past year, underperforming the industry’s growth of 80.2%.
Over the past few months, several banks have announced new share-repurchase programs. Some of these are Civista Bancshares, Inc. (CIVB - Free Report) , First Financial Northwest, Inc. (FFNW - Free Report) , and WesBanco, Inc. (WSBC - Free Report) .
Civista Bancshares’ board of directors authorized the buyback of up to an aggregate of $13.5 million of its outstanding shares. The plan will expire on Aug 10, 2022. First Financial Northwest announced a new share-repurchase program, under which it will buy back about 5% of the outstanding common stock or 476,000 shares.
WesBanco’s board of directors authorized an additional share buyback of up to 3.2 million shares. The program has no expiration date.
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Cathay General Bancorp (CATY) Up 1.6% on New Share Buyback Plan
Shares of Cathay General Bancorp (CATY - Free Report) have rallied 1.6% in response to the new share buyback program announced last week. The company’s board of directors authorized the repurchase of up to $125 million worth of shares. The program has no expiration date.
As of Sep 2, 2021, Cathay General Bancorp had nearly 77.9 million shares outstanding.
The current plan has been unveiled following the completion of the earlier buyback authorization in August. This program, announced in April 2021, had authorization to repurchase $75 million worth of shares. Under the program, Cathay General Bancorp had repurchased more than 1.8 million shares at an average price of $40.93.
Prior to this, Cathay General Bancorp had a buyback program that was completed in December last year. Under it, the bank had repurchased more than 1.5 million shares at an average price of $32.43.
In addition to the buyback program, Cathay General Bancorp pays regular quarterly dividends. The company has been paying dividend of 31 cents per share since November 2018, marking an increase of 29.2% from prior payout of 24 cents.
Considering the last day’s closing price of $39.79, the company’s dividend yield currently stands at 3.12%. This yield is not only attractive to income investors but also represents a steady income stream. The yield is impressive compared with the industry’s average of 1.81%.
Cathay General Bancorp has a solid balance sheet and liquidity position. As of Jun 30, 2021, the company had total debt worth $162.4 million (with the majority being long term in nature), and cash and due from banks totaled $133.5 million. Its times interest earned of 37.7 and total debt/total capital of 6.2% at the end of second-quarter 2021 improved sequentially.
Given the earning strength and decent liquidity position, Cathay General Bancorp will likely be able to sustain the current level of capital deployments and continue enhancing shareholder value. However, low interest rates remain a major near-term concern.
Shares of Cathay General Bancorp have rallied 58.9% over the past year, underperforming the industry’s growth of 80.2%.
Image Source: Zacks Investment Research
Currently, Cathay General Bancorp carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Similar Moves by Other Banks
Over the past few months, several banks have announced new share-repurchase programs. Some of these are Civista Bancshares, Inc. (CIVB - Free Report) , First Financial Northwest, Inc. (FFNW - Free Report) , and WesBanco, Inc. (WSBC - Free Report) .
Civista Bancshares’ board of directors authorized the buyback of up to an aggregate of $13.5 million of its outstanding shares. The plan will expire on Aug 10, 2022. First Financial Northwest announced a new share-repurchase program, under which it will buy back about 5% of the outstanding common stock or 476,000 shares.
WesBanco’s board of directors authorized an additional share buyback of up to 3.2 million shares. The program has no expiration date.