Northern Trust Hikes Dividend

Zacks

Hours after reporting its first quarter 2013 financial results, Northern Trust Corporation (NTRS) in an attempt to impress its shareholders, announced an increase in its quarterly dividend rate along with the approval for a new share buyback program.

The new dividend rate has been fixed at 31 cents, an increase of 3.33% over the previous rate of 30 cents and will be paid on July 1, 2013 to shareholders of record as on June 7, 2013. In Mar 2012, the company made a similar announcement of a 7.1% rise in dividend rate surging from 28 cents to 30 cents.

Also, Northern Trust Corporation received approval for a 12 million share buyback program that replaces its existing authorization.

Consistent dividend payments with occasional increases and share buybacks have been Northern Trust Corporation’s favoured mode of rewarding its shareholders over time. If we steal a look into the results of the quarter ended Mar 31, 2013, the company paid $73 million in dividends and repurchased 1.4 million shares worth $74 million at an average price of $53.08 per share.

Apart from the capital deployment actions of Northern Trust, a brief discussion on the financial results of the company’s first quarter 2013 is also given below:

The company’s earnings per share in the quarter came in at 71 cents, roughly 6% above the year-ago earnings but a cent behind the Zacks Consensus Estimate.

Results on a year-over-year basis benefited from top-line growth, partially offset by a rise in operating expenses. Further, improving credit quality and strong capital ratios were the tailwinds.

The Zacks Consensus Estimate for Northern Trust currently stands at 72 cents for the second quarter 2013, reflecting an increase of 7.2% year over year. Earnings Estimate for 2013 and 2014 are at $3.23 and $3.61, up 12.96% and 11.9%, respectively.

Northern Trust currently retains a Zacks Rank #3 (Hold). Among the major regional banks, Fifth Third Bancorp (FITB) and BB&T Corporation (BBT) are scheduled to report on Apr 18, while State Street Corporation (STT) will report on Apr 19.
 

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