Business services provider Lender Processing Services, Inc. (LPS) recently declared second quarter 2013 dividend of 10 cents per share or 40 cents on an annualized basis. The dividend is payable on Jun 13 to shareholders of record as of May 30.
Based on the closing price of $24.45 on Apr 19, 2013, the dividend affirms a yield of 1.6%. A steady dividend payout is part of the long-term strategy of Lender Processing to provide attractive risk-adjusted returns to its stockholders. The company also has a share repurchase program in place, under which it can purchase common stock over a period of time either through the open market or through negotiated transactions.
Over the years, Lender Processing has consistently returned significant cash to its shareholders through dividends and share repurchases. Lender Processing expects to fund the share repurchases through available cash. At year-end 2012, cash and cash equivalents of the company aggregated $236.2 million. The company also expects to generate significant cash flow to further repurchase shares and maintain its steady dividend payout. Net cash provided by operating activities in the last reported quarter stood at $434.5 million.
Headquartered in Jacksonville, FL, Lender Processing provides integrated technology and outsourced services to the mortgage lending industry. The company’s products and services span the entire life cycle of a mortgage, from origination to servicing to foreclosure.
Moving forward, Lender Processing is well positioned to enhance the mortgage value chain and deliver innovative technology, data and expertise to its clients. The rapidly growing mortgage landscape continues to create new requirements for its clients. Also, the recent conclusions of many of the company’s legal matters allow it to focus more on growth and innovation to create new opportunities for the company.
However, the company needs to be wary of intense competition from industry bigwigs, which include formidable names such as Alliance Data Systems Corporation (ADS), Equifax Inc. (EFX), and Fiserv, Inc. (FISV), each carrying a Zacks Rank #2 (Buy). However, Lender Processing currently has a Zacks Rank #4 (Sell).
ALLIANCE DATA (ADS): Free Stock Analysis Report
EQUIFAX INC (EFX): Free Stock Analysis Report
FISERV INC (FISV): Free Stock Analysis Report
LENDER PROC SVC (LPS): Free Stock Analysis Report
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