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SAN JUAN - Popular, Inc. (NASDAQ: BPOP), a leading financial institution based in Puerto Rico, has announced its intention to buy back up to $500 million of its common stock. This capital action is part of the company's strategy to manage its robust capital position and deliver value to its shareholders. The repurchase program is set to be carried out through various means, including open market transactions and privately negotiated deals, contingent on market conditions and other influencing factors.
The corporation also revealed plans to increase its quarterly common stock dividend from $0.62 to $0.70 per share, starting with the dividend payable in the first quarter of 2025. This proposed dividend hike is subject to approval by the corporation's Board of Directors.
Ignacio Alvarez, the Chief Executive Officer of Popular, Inc., stated that the capital actions underscore the company's strong capital standing, which enables it to meet customer needs while also increasing shareholder returns through dividends and stock repurchases.
Popular, Inc. stands as the foremost financial institution in Puerto Rico by assets and deposits and is recognized among the top 50 U.S. bank holding companies by assets. Established in 1893, its principal subsidiary, Banco Popular de Puerto Rico, offers a wide range of banking services in Puerto Rico and the U.S. Virgin Islands.
The corporation's mainland U.S. presence includes retail, mortgage, and commercial banking services through Popular Bank, which operates branches in New York, New Jersey, and Florida.
In other recent news, Popular, Inc. has reported strong Q1 earnings, with a net income of $103 million. Adjusted for specific items, the net income would have been $135 million. In addition to this, the company has experienced growth in net interest income and a decrease in provision for credit losses.
Keefe, Bruyette & Woods have responded to these results by raising their price target for Popular, Inc. to $110 from the previous $103, maintaining an Outperform rating on the shares.
In other developments, Javier D. Ferrer has been appointed as the new President of Popular, Inc. Ferrer, who has been serving as the company's Chief Operating Officer since 2022, will continue in this role while also assuming presidential duties. He will oversee operations across business units in Puerto Rico, the mainland United States, and the Virgin Islands, and will also direct strategic planning and data analytics.
InvestingPro Insights
As Popular, Inc. (NASDAQ: BPOP) announces its stock buyback and dividend increase plans, key metrics and insights from InvestingPro provide a deeper understanding of the company's financial health and market position. With a market capitalization of $7.44 billion and a P/E ratio of 15.24, the company stands out in the financial sector. Its adjusted P/E ratio for the last twelve months as of Q1 2024 is slightly lower at 14.79, suggesting a potentially more attractive valuation relative to earnings.
The company has demonstrated a commitment to shareholder returns, not only through the announced capital actions but also by raising its dividend for 5 consecutive years, and maintaining dividend payments for 10 consecutive years—an InvestingPro Tip that aligns with the proposed dividend hike. Analysts have taken note of Popular, Inc.'s prospects, with 4 analysts revising their earnings estimates upwards for the upcoming period, indicative of expected performance improvements.
Investors tracking performance metrics will note that Popular, Inc. has experienced a high return over the last year, with a 54.73% one-year price total return. Additionally, the stock is trading near its 52-week high, at 99.64% of this peak, reflecting strong market confidence. However, another InvestingPro Tip cautions that the stock's Relative Strength Index (RSI) suggests it may be in overbought territory, signaling potential for a price correction.
For readers interested in further detailed analysis and additional InvestingPro Tips for Popular, Inc., visit https://www.investing.com/pro/BPOP. There are 14 more tips available on InvestingPro, which can be accessed with a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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