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Regions (RF) Rewards Shareholders with 29% Dividend Hike

As part of its 2017 capital plan (approved by the Federal Reserve), Regions Financial Corporation’s RF board of directors announced a 29% hike in the company’s quarterly common stock dividend. The revised quarterly dividend now comes in at 9 cents per share compared with the previous figure of 7 cents. This dividend will be paid on Sep 29 to shareholders of record as of Sep 8, 2017.

Since 2013, Regions has been raising its dividend annually. From paying 1cent a share as quarterly dividend during the financial crisis, the company has come a long way in displaying its capital strength. Prior to this hike, the company had raised its dividend by 7.7% (from 6.5 cents to 7 cents per share) in Apr 2017.

Considering Thursday’s closing price of $14.39 per share, the dividend yield is currently valued at 2.5%.

Additionally, Regions announced a cash dividend of $15.9375 per share of Series A Preferred Stock outstanding (equivalent to approximately $0.398438 per depositary share) and a cash dividend of $15.9375 per share of Series B Preferred Stock outstanding (equivalent to approximately $0.398438 per depositary share). Both these dividends will be paid on Sep 15 to stockholders of record as of Sep 1, 2017.

Further, Regions’ shares rallied 60.8% in the last one year compared with 36.7% growth recorded by the industry it belongs to. Further, the company has a Momentum Style Score of ‘A’.



Are you contemplating investment in this value enhancing Zacks Rank #3 (Hold) stock? Before taking any decision, let’s have a look at Regions’ fundamentals and growth prospects.

Earnings Strength: Regions has witnessed historical (3–5 years) earnings per share growth of 15.33% compared with 12.50% growth for the industry. In addition, the company’s estimated long-term EPS growth rate of 15.82% promises rewards for investors. It also recorded an average positive earnings surprise of 6.89%, over the trailing four quarters.

Prudent Expense Management: Though non-interest expenses increased during the first quarter of 2017, the figure declined in the second quarter. Furthermore, expenses remained volatile in 2015 and 2016, and witnessed a negative Compound Annual Growth Rate (CAGR) of nearly 3% over the five-year period (2010–2014). Notably, the company is on track for a $300-million expense reduction by 2018 (through consolidation of 100–150 branches). Additionally, encouraged by the recent increases in market interest rates, management anticipates eliminating an additional $100 million by 2019.

Leverage: Regions’ debt/equity ratio is 0.42 against the S&P 500 average of 0.68, indicating lower debt burden compared with the industry. It highlights the company’s sound financial flexibility.

Stock is Undervalued: Regions has a P/E ratio of 14.53x compared to the S&P 500 average of 18.86x. In addition, the company has a P/B ratio of 1.07x compared to the S&P 500 average of 3.27x. Based on these ratios, the stock seems undervalued.

Stocks to Consider

BancFirst Corporation BANF has been witnessing upward estimate revisions for the last 30 days. Also, the company’s shares have risen nearly 60.8%, over the last one year. It sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BOK Financial Corporation BOKF has been witnessing upward estimate revisions for the last 30 days. Over the last one year, the company’s share price has been up more than 32%. It currently carries a Zacks Rank #2 (Buy).

JPMorgan Chase & Co. JPM has been witnessing upward estimate revisions for the last 30 days. Additionally, the stock soared nearly 43.1%, over the past one year. It currently has a Zacks Rank #2.

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J P Morgan Chase & Co (JPM): Free Stock Analysis Report
 
Regions Financial Corporation (RF): Free Stock Analysis Report
 
BOK Financial Corporation (BOKF): Free Stock Analysis Report
 
BancFirst Corporation (BANF): Free Stock Analysis Report
 
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