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Huntington Bancshares Incorporated Message Board

  • cwamember cwamember Mar 16, 2012 9:28 AM Flag

    Thoughts on the stock buyback

    Initially I felt good about the buyback. $182M at today's price of $6.45 has the potential to retire 28M shares of the 865M outstanding. However if spent on dividends, $182M would pay out an additional .20/yr (865/182 = .21). I gotta believe that a 100% + increase in annual dividend payment per share is a bigger attraction than the potential of retiring 3.2% of shares.

    HBAN currently has a dividend yield of 2.7%. A $.20 increase would push it to 5.5% which would have attracted many dividend seeking investors.

    The corporate advantage to announced buybacks vs. declared dividends is that unlike dividends, you are not required to spend a dime.

    Thoughts?

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