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American Capital, Ltd. Message Board

  • mjbinsanjose mjbinsanjose Aug 1, 2012 4:30 PM Flag

    combination dividend, stock buyback

    The only other asset manager with similar characteristics to ACAS is TROW. They have about $4 billion in net asset compared to about $5 billion at ACAS. They have a 23% return on equity compared to 24% at ACAS. They have a 43% profit margin compared to about 53% at ACAS. They have a reputation for out performing the competition, although nothing close to AGNC. They earned about $750 million last year. They spent about one third of that to pay shareholders a 2.2% dividend. They spent the other two thirds to buy back about 3% of their company stock, which sells for 20 times trailing income.By doing this, they were able to increase quarterly profit from 73 cents per share to 76 cents per share. I do not know about you, but I think that repurchasing 10% of company stock and increasing profits by 60% per share is a slightly better deal. So what do you think?

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