Heartland Enhances Buyback Program - Analyst Blog
16 Mai 2013 - 4:50PM
Zacks
In an effort to boost its
shareholder value, the board of directors of Heartland
Payment Systems (HPY), approved a new share buyback
program. As per the authorization, the company will be able to
repurchase up to $75 million worth of shares through open market or
privately negotiated transactions.
This new program has been authorized due to the expiration of the
previous $50 million buyback program and is effective immediately.
Under its previous authorization, Heartland purchased approximately
1.7 million shares at an average share price of $29.98.
Heartland's financial strength allows it to continue with its
buyback program. As of Mar 31, 2013, cash and cash equivalents of
the company stood at $37.5 million. The company also expects to
generate and utilize strong cash flow to enhance shareholder worth
through repurchases. Heartland used $14.3 million of operating cash
during the first quarter of 2013 to buyback approximately 0.5
million shares, taking the tally to $150 million worth of shares
repurchased in the last 18 months.
Heartland expects to deliver operating earnings per share in a
range of $1.92–$1.96 for full year 2013. We believe that the share
repurchases will help it achieve the guided range. The Zacks
Consensus Estimates for 2013 is currently pegged at $1.99, higher
than the company’s guidance and also representing a 20.5%
improvement year-over-year.
Additionally, the company declared a quarterly dividend of 7 cents
per share payable on Jun 15, 2013 to shareholders of record as of
May 24, 2013. Heartland has maintained a steady dividend payout,
including a $2.6 million paid in the first quarter of 2013.
The company continues to focus on improving revenue, expanding
margins and fortifying its capital structure, which helped it
deliver solid results in the first three months of 2013.
However, no earnings momentum has been witnessed over the last 7
days. We expect the news of the new buyback authorization will
encourage analysts to pull up their estimates.
Among others who sought to increase shareholders’ confidence,
Lender Processing Services, Inc. (LPS) authorized
a $100 million share repurchase program to purchase common stock
over a period of time through the open market or negotiated
transactions in Feb 2013. The company intends to complete the share
repurchase program by Jun 30, 2014.
Heartland currently carries a Zacks Rank #3 (Hold). Among others in
the industry, Official Payment Holdings Inc.
(OPAY) carries a favorable Zacks Rank #1 (Strong Buy) and
Visa Inc. (V) carries a Zacks Rank #2 (Buy).
HEARTLAND PAYMT (HPY): Free Stock Analysis Report
LENDER PROC SVC (LPS): Free Stock Analysis Report
OFFICIAL PAYMNT (OPAY): Get Free Report
VISA INC-A (V): Free Stock Analysis Report
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