The Board of Directors of HCI Group, Inc. HCI recently authorized a share repurchase plan, which permits the company to buy back shares worth up to $20 million. The program is scheduled to expire on Dec 31, 2016.
The company boasts an efficient share repurchase portfolio. In 2014, HCI Group had initiated a $0.04 million share buyback program that expired in Mar 2015. Subsequently, in the first nine months of 2015 the company repurchased 0.04 million shares for $1.6 million. On execution of the latest share repurchase plan, the company will be able to reduce its outstanding share count, which will definitely have a positive impetus to the company’s earnings per share (EPS).
Not only does the company engage in share buybacks, but it also is a regular dividend payer. The latest endeavor in this regard is the declaration of regular quarterly cash dividend of 30 cents per share in Oct 2015. This dividend will be paid on Dec 18 to shareholders on record as of Nov 20, 2015. The latest quarterly dividend represents a 9% increase over the quarterly dividend paid in the same period a year ago.
HCI Group remains focused on enhancing its shareholders’ value – be it through share buybacks or dividend payouts – while maintaining adequate liquidity for its business strategies. The company has enough liquidity to support its capital deployments without compromising its financial strength and credit ratings.
Cash and cash equivalents surged 5.4% to $331.5 million as of Sep 30, 2015 from $314 million at year-end 2014. Operating cash flows soared 66.5% year over year to $106.3 million in the first nine months of 2015.
While the repurchase authorization will boost investor confidence, its execution will reduce share count and therefore, should spur bottom-line growth.
HCI Group currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the property and casualty insurance space are RLI Corp. RLI, Cincinnati Financial Corp. CINF and Hallmark Financial Services Inc. HALL. All three stocks sport a Zacks Rank #1 (Strong Buy).
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