LegacyTexas Financial Group, Inc. (LTXB - 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 around 5% of the total shares outstanding as of Dec 7, 2018.
"We are pleased to announce the authorization of the share repurchase program," said Kevin Hanigan, the company's president and chief executive officer. "Our strong capital levels and solid operating results allow us to repurchase shares while continuing to invest in opportunities to drive future performance," he added.
Notably, LegacyTexas Financial has also been paying quarterly dividends, along with regular hikes. Since 2011, the company has raised its dividend seven times. The dividend was last hiked in October 2018, by 37.5%, to 22 cents per share.
With strong liquidity and balance-sheet position, we believe LegacyTexas Financial 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.
Revenue Growth: Organic growth is a key driver for LegacyTexas Financial, with its sales witnessing a compound annual growth rate of 26.7% over the five-year period (2013-2017). The company’s projected sales growth (F1/F0) of 7.19% (against nil industry average) indicates continued improvement in revenues.
Earnings Strength: LegacyTexas Financial’s long-term (three-five years) estimated EPS growth rate of 10% promises rewards for investors, over the long run. Also, the company’s projected earnings growth of 29.8% for 2018 indicates continued improvement in earnings.
Superior Return on Equity: LegacyTexas Financial has a return on equity of 12.44% compared with the industry average of 8.33%. This indicates that the company is efficient in utilizing shareholder funds.
LegacyTexas Financial’s shares have depreciated around 17%, in the past six months, compared with the industry’s decline of 16.7%. Despite a dismal price performance, the company’s stock looks overvalued, with respect to its price-to-earnings (P/E) and price-to-book (P/B) ratios. It has a P/E (F1) ratio of nearly 12.74 compared with the industry average of 12.72. Furthermore, the company’s P/B ratio of 1.68 comes in above the industry average of 1.2. The stock currently carries a Zacks Rank #3 (Hold).
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