ESSA Bancorp, Inc. ESSA recently announced a new share-repurchase plan. The board of directors has approved the repurchase of about 500,000 shares of the company’s common stock.
Following this development, shares of the company have witnessed a slight improvement, reflecting investor optimism.
The latest plan comes close on the heels of ESSA Bancorp’s recently-concluded share-buyback program. The company’s previous program was announced in July 2019 and was completed on Aug 24, 2020. This program also involved the repurchase of about 500,000 shares.
The company may repurchase the shares through different options like open market purchases, privately-negotiated stock transactions or in any other manner compliant with the law. However, the program does not compel the company to repurchase the shares or the exact number of shares that is to be repurchased.
Additionally, ESSA Bancorp has been paying regular quarterly dividends. Recently, it announced a quarterly dividend of 11 cents per share. The dividend will be paid on Sep 30, to shareholders of record as of Sep 16, 2020. Apart from this, the company has been hiking its quarterly dividends since 2017, with the latest hike of 10% announced on Nov 21, 2019.
As of Jun 30, 2020, the company had a total debt of $289.54 million, higher than the cash and cash equivalents balance of $159.98 million. However, at the end of second-quarter 2020, ESSA Bancorp’s total debt to total capital of 43.78% improved sequentially and is lower than the industry average of 45.42%. Thus, given the strong balance sheet, the company will likely be able to sustain the current level of capital-deployment activities.
Over the past year, shares of ESSA Bancorp have depreciated 10.9% compared with the 20% decline of the industry it belongs to.
Currently, ESSA Bancorp carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A few other finance stocks that have announced new/additional buyback authorizations in 2020 include MVB Financial MVBF, PennyMac Financial PFSI and Jefferies Financial JEF.
MVB Financial announced that it would repurchase up to $5 million worth of outstanding common stock. PennyMac Financial repurchased 6.9 million shares at a price of $34 per share from The BlackRock Foundation, the charitable arm of BlackRock, Inc. in June. Jefferies Financial increased its buyback program to $250 million in January 2020, while in March the company authorized an additional share repurchase of $100 million.
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