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IBERIABANK Unveils New Share Buyback Plan: Worth a Look?

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IBERIABANK Corporation (IBKC - Free Report) continues to reward its shareholders through dividend hikes or additional share repurchases. The company recently announced a new share-buyback plan with authorization to repurchase 2.765 million shares, representing around 5% of the total shares outstanding.

Such repurchases may be made in the open market, in privately negotiated transactions, or otherwise. While the authorization does not have a fixed expiration date, the repurchase authorization does not obligate the company to repurchase any dollar amount or number of securities and may be suspended or discontinued any time.

Recently, IBERIABANK completed previous authorization by repurchase of 1.1375 million shares at a weighted average price of $77.54. Notably, the plan was announced in May 2018.

Since 2000, the company has completed 10 such share-repurchase authorization, which sums to nearly 4.8 million common shares. During buyout, shares buyback under those programs were worth $244 million of investment value at a weighted average price of nearly $50.91 per share acquired. Notably, these were adjusted for the five-for-four common stock split paid on Aug 15, 2005.

Notably, IBERIABANK has also been paying quarterly dividends, along with regular hikes. Since 2016, the company has raised its dividend five times. The dividend was last hiked in October 2018 by 5% to 41 cents per share.

With strong liquidity and balance-sheet position, we believe IBERIABANK will continue to reward its shareholders, moving ahead. So, keeping this in mind, is the company worth considering? Let’s dig deeper into its financials and fundamental strengths.

Value Score: IBERIABANK currently has a Value Score of B. The Value Score condenses all valuation metrics into one actionable score that helps investors steer clear of “value traps” and identify stocks that are truly trading at a discount. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.

Earnings Strength: IBERIABANK has recorded an earnings growth rate of 10.3%, over the last three to five years. Retaining its earnings momentum, the earnings growth rate is anticipated to be around 47.4% for the current year and 8.3% for 2019. Further, the company recorded an average positive earnings surprise of 3.29%, over the trailing four quarters.

Revenue Growth: Organic growth is a key driver for IBERIABANK, with its sales witnessing a compound annual growth rate of 16.7% over the five-year period (2013-2017). The company’s projected sales growth (F1/F0) of 18.53% (against 5.21% industry average) indicates continued improvement in revenues.

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