’Reddit is built for this moment’ - Stock soars on crushed earnings
SAN ANTONIO - U.S. Global Investors, Inc. (NASDAQ:GROW), an investment advisory firm, has updated its stock repurchase plan, announcing a systematic buyback of up to $5 million of its common stock. This program, which began on September 13, 2024, and is set to run through December 31, 2024, accounts for 14% of the firm's market capitalization.
The company's board of directors has approved this initiative as a method to return excess capital to shareholders, signaling confidence in the firm's long-term growth and financial stability. CEO Frank Holmes expressed that the buyback offers an attractive opportunity to enhance shareholder value, potentially increasing earnings per share and ownership value.
U.S. Global Investors also continues its monthly dividend program, approving payments of $0.0075 per share for October through December 2024. With record dates set for October 14, November 11, and December 16, and corresponding payment dates on October 28, November 25, and December 30, the dividend yields an annualized rate of 3.54% based on the September 18 closing price of $2.54.
The company highlighted its strong shareholder yield, which stood at 9.41% for the 12 months ending June 30, 2024, surpassing the yield on the 10-year Treasury note. Holmes underscored the importance of shareholder yield, which includes dividends, buybacks, and debt reduction, for fostering stock growth.
In addition to its financial strategies, U.S. Global Investors pointed to the surge in gold prices, an asset central to many of its investments. Gold hit a new all-time high of nearly $2,590 per ounce on September 16, 2024, amid geopolitical tensions and expectations of a Federal Reserve rate cut, which occurred on September 18. The decline in Treasury yields to a 52-week low of 3.6% has also been noted as a factor contributing to gold's performance.
This news is based on a press release statement from U.S. Global Investors, Inc. The continuation of future cash dividends will be subject to the company's board of directors' discretion based on several factors, including the company's financial performance.
In other recent news, U.S. Global Investors reported a strategic growth amid challenges in its latest earnings call. Despite a decrease in assets under management and net income, the company emphasized a significant shareholder yield and successful implementation of its "quantum mental" research strategy. The firm also highlighted the recovery of the airline industry and the potential of gold investments considering the rising global debt.
U.S. Global Investors has merged its Europe-Domiciled Airlines ETF into the Travel UCITS ETF on the London Stock Exchange to diversify its offerings. The company maintains a 3.5% dividend yield and a robust buyback strategy, repurchasing 767,751 Class A shares for approximately $2.186 million. Despite facing challenges, the company reported a total shareholder yield of 9.41%, outperforming the five-year treasury yield of 4.33%.
The company's net income for fiscal year 2023 was $1.3 million, down from $3.1 million the previous year. However, the firm remains optimistic about its smart beta 2.0 investment strategy and its growth potential in international markets. These are among the recent developments for U.S. Global Investors.
InvestingPro Insights
As U.S. Global Investors, Inc. (NASDAQ:GROW) embarks on its stock repurchase plan, the company's aggressive share buybacks highlight management's confidence in the firm's valuation and future prospects. This strategy aligns with the InvestingPro Tip that management has been actively repurchasing shares, which can be indicative of the company's belief in its undervalued stock and its commitment to shareholder value.
The company's financial stability is further evidenced by its ability to maintain dividend payments for 18 consecutive years, a testament to its consistent performance and reliability as an income-generating investment. This dedication to regular dividends is complemented by the firm's solid liquidity position, as indicated by another InvestingPro Tip noting that liquid assets exceed short-term obligations.
InvestingPro Data provides a snapshot of the company's financial health and market position. As of the last twelve months of Q4 2024, U.S. Global Investors boasts a market capitalization of $35.16 million and a price-to-earnings (P/E) ratio of 27.12, which adjusts to 26.17 on a trailing twelve-month basis. Despite a challenging period with revenue growth contracting by 27.13% during the same period, the company has managed to maintain a gross profit margin of 56.28%, showcasing the efficiency of its operations.
InvestingPro also indicates that the stock is trading near its 52-week low, with a price 81.19% of its 52-week high, potentially offering a buying opportunity for investors considering the company's long-term growth potential and current dividend yield of 3.54%.
For investors seeking more in-depth analysis and additional insights, InvestingPro offers a wealth of tips, with several more available at: https://www.investing.com/pro/GROW.
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