Investing

8 Buybacks and Dividends Just Too Big to Ignore

Jon C. Ogg

Now that stocks have bounced off of lows, many investors are looking for those that either offer great value or that are taking very proactive shareholder-friendly measures. When it comes to returning capital to shareholders, the two yardsticks that are the easiest to see immediately are share buyback plans and dividends. And shareholders love it even more when companies get more aggressive on stock buybacks or when companies are raising their dividends.

24/7 Wall St. has tracked multiple dividends and buybacks in September, but at the mid-month mark there have been eight companies that have had dividend or buyback announcements that are simply too big to ignore. We have included data on the size of buybacks or on the magnitude of the dividend hikes. Color has also been added on the yield or how each buyback plan compares to trading volume or to the overall size of the company. Additional color has been added as well.

These are the eight dividends and stock buyback plans so far in September that are simply too big to ignore.

American Tower

American Tower Corp. (NYSE: AMT) has yet another dividend hike. The company seriously needs to hire a new press release writer, because its release merely said that its board of directors “has declared its quarterly cash distribution of $0.46 per share on shares of the Company’s common stock. The distribution is payable on October 7, 2015 to such stockholders of record at the close of business on September 23, 2015.” What matters here is that American Tower keeps juicing up its dividend, and the yield is now finally above the 2% mark.

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When American Tower converted to a real estate investment trust (REIT), it had a tiny yield that was unlikely to entice REIT investors. Now trading at $89.26, it has a 52-week trading range of $87.95 to $106.31, and its consensus analyst price target is $114.16. While the telecom carriers are at war with each other, American Tower gets to use the arms-dealer model by selling its services to every carrier. Its portfolio is roughly 97,000 communications sites.

Assurant

Assurant Inc. (NYSE: AIZ) made two big splashes at once. It is selling its employee benefits business for $940 million to Sun Life Financial for nearly $1 billion, and it simultaneously announced an enhanced capital management plan to return additional capital to shareholders. Assurant hiked its dividend by a whopping 67%, up to $0.50 from $0.30 per share. It also authorized the repurchase of up to an additional $750 million of its common stock, which is impressive for a $5 billion market cap.

At $76.82, Assurant has a 52-week range of $59.73 to $80.08 and a consensus target price of $81.86. Merrill Lynch was much more bullish. Assurant’s new dividend yield will jump from 1.6% or so up to a very impressive 2.6%. That $750 million, if spent in short order, would represent almost 15% of its entire outstanding share base. Institutions are shown to own almost the entire company, with the top 10 holders owning close to 40% of the float alone. That buyback is close to 10 million shares at prevailing prices, which is about 14 days worth of volume.

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