Lancaster, PA-based Fulton Financial Corporation FULT continues to reward its shareholders. The company announced a 12.5% hike in its dividend to 9 cents per share. The dividend will be paid on Apr 15 to shareholders of record as of Apr 1.
Based on yesterday’s closing price, Fulton Financial’s dividend yield, taking into account the newly announced rate, came in at 2.88%. We believe that driven by strong liquidity position, the company will continue to enhance its shareholders’ value in the years ahead.
This is Fulton Financial’s first dividend hike since the third quarter of 2012, when it was raised nearly 14.3% from 7 cents per share. Notably, in Dec 2014, Fulton Financial paid a special dividend of 2 cents per share.
Fulton Financial has been trying to further improve its capital ratios. In Nov 2014, the company had issued approximately $100 million of 4.50% Subordinated Notes, due for maturity in 2024. These notes qualify as Tier 2 capital for regulatory purposes.
Moreover, Fulton Financial had announced that proceeds from the issue of notes will be utilized for repurchasing roughly $100 million of shares. This buyback pertains to an accelerated share repurchase (“ASR”) agreement that the company had entered into with The Goldman Sachs Group, Inc. GS. The final settlement of ASR is expected to take place on Apr 17.
We expect Fulton Financial’s efforts toward boosting shareholders’ value will go a long way in increasing investors’ confidence in the stock.
Currently, Fulton Financial carries a Zacks Rank #4 (Sell). Some better-ranked stocks include Suffolk Bancorp SUBK and Malvern Bancorp, Inc. MLVF, each sporting a Zacks Rank #1 (Strong Buy).
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