Back to top

Image: Bigstock

HCI Group (HCI) Rewards Investors Via New Share Buyback Plan

Read MoreHide Full Article

HCI Group, Inc. (HCI - Free Report) recently announced rewards for stockholders in the form of share buyback authorization. The repurchase program is in line with its commitment to boost shareholder value. The move comes after one year without any repurchase plan.

HCI Group’s board of directors has authorized a share buyback plan of $20 million. The buyback of HCI’s common shares can be carried out in the open market or through privately negotiated transactions, subject to market conditions and other factors. The buyback program is authorized for this year. Its previous repurchase program expired in 2020, when it bought back and retired 129,142 shares.

The new program has way more authorized funds than what it used in 2020 and 2019. So far, the company has returned 48% of its market capitalization to shareholders through buybacks and dividends. The company has paid dividends for 45 consecutive quarters. Its quarterly dividend of 40 cents ($1.60 on an annualized basis) per share translates to a 2.3% dividend yield, higher than the industry average of 0.3%.

The announcement of the repurchase plan follows its better-than-expected fourth-quarter 2021 results. HCI posted a narrower-than-estimated loss on the back of the growing Homeowners Choice portfolio and sustained expansion across its insurance operation — TypTap Insurance business, which was introduced in 2016. Yet, the Zacks Consensus Estimate for first-quarter 2022 bottom line is 9 cents per share, which indicates an 88.3% year-over-year decline. Also, for full-year 2022, its bottom-line estimates were revised 52% downward in the past 60 days.

Over the past year, shares of HCI declined 7.5%, underperforming the industry’s 14.7% growth.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Key Picks

HCI Group currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the insurance – property and casualty space include Cincinnati Financial Corporation (CINF - Free Report) , First American Financial Corporation (FAF - Free Report) and Berkshire Hathaway Inc. (BRK.B - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cincinnati Financial’s consistent cash flow and sufficient cash balance continue to boost liquidity. Based in Fairfield, OH, Cincinnati Financial’s bottom-line estimates for first-quarter 2022 indicate an 8% year-over-year rise. CINF beat earnings estimates in each of the last four quarters, with an average of 38.5%.

First American Financial has been generating improving revenues over the years on the back of growing direct premiums and escrow fees, and title agent premiums. The Zacks Consensus Estimate for FAF’s 2022 bottom line has improved 2.2% in the past 30 days. First American Financial beat earnings estimates in each of the last four quarters, with an average of 29.4%.

Berkshire Hathaway is expected to benefit from disciplined capital management and acquisitions. The Zacks Consensus Estimate for BRK.B’s bottom line for 2022 indicates a 6.1% year-over-year rise. Headquartered in Omaha, NE, Berkshire Hathaway beat earnings estimates thrice in the last four quarters and missed once, with an average surprise of 11.9%.

Published in