Navient Corporation NAVI seems to be on track with its efforts to enhance shareholders’ value. The Wilmington-based company announced an additional share repurchase of $700 million of its outstanding common stock. No expiration date is attached with this program.
The latest approval of the share repurchase program follows the $1.0 billion authorization announced in December 2014.
Given its decent cash generating capacities, Navient remains committed to increase shareholders’ wealth through dividend payments and share buybacks. Notably, in January 2015, the company declared a 7% hike in its quarterly dividend.
During the nine months ended September 2015, Navient returned $182 million to its shareholders through dividends and repurchased $775 million in common stock. As of Sep 30, 2015, the company’s cash and cash equivalents stood at $1.3 billion.
Navient – the loan management, servicing and asset recovery company formed through the strategic split of Sallie Mae last year – also remains focused on initiatives that lay the foundation for independent growth. Strengthening its asset recovery and business process outsourcing capabilities into the lucrative health care payments sector, Navient acquired Hendersonville, TN-based Xtend Healthcare this year in October.
Previously in February, the company announced the acquisition of Gila LLC, an asset recovery and business process outsourcing firm, primarily catering to state and local government market.
We believe Navient will be able to maintain its leading position in the student-lending market through various growth avenues, including its continued acquisition of federal and private student loans. Also, steady capital deployment activities are encouraging for investors. However, rising expenses, a low rate environment and litigation woes remain concerns for the company.
Currently, Navient carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the finance space include Credit Acceptance Corp. CACC, Enterprise Financial Services Corp. EFSC and Middlefield Banc Corp. MBCN, each sporting a Zacks Rank #1 (Strong Buy).
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