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Arrow Financial (AROW) Announces 3% Stock Dividend, Shares Dip

·3 min read

Arrow Financial Corporation’s AROW board of directors has declared a 3% stock dividend to be distributed on Sep 23, 2022. Shareholders of record as of Sep 19 will receive three additional shares of the company for every 100 shares owned.

Also, certificate shareholders will receive the cash equivalent of any fractional shares to which they are entitled.

Following the announcement of the news, shares of AROW lost 2.4%.

Prior to this, the company declared a 3% stock dividend in August 2021, which was distributed on Sep 24, 2021.

Apart from stock dividends, AROW regularly pays cash dividends. The latest cash dividend of 27 cents per share was announced in July 2022. The dividend will be paid out on Sep 15, 2022, to shareholders of record as of Sep 1.

Notable, in January 2022, the company announced a dividend hike of 3.8%. The cash dividend was increased from 26 cents per share to 27 cents.

Considering the last day’s closing price, Arrow Financial’s dividend yield currently stands at 3.4%. The yield is not only attractive to income investors but also represents a steady income stream.

Investors interested in the Zacks Rank #2 (Buy) stock can look at its fundamentals and growth opportunities. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Arrow Financial’s past performance depicts a robust earnings picture. Its earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, with a surprise of 0.2%, on average. Over the last three-five years, AROW’s earnings witnessed growth of 12.4%.

While the company’s earnings are projected to decline 3.9% in 2022, the trend will likely reverse after that. In 2023, earnings are expected to grow 12.8%.

Over the last three years (2019-2021), the company’s revenues have witnessed a compound annual growth rate of 10.6%. The positive momentum is expected to continue in the near term. The company’s projected sales growth rates are 3.4 % and 8.1% for 2022 and 2023, respectively.

Arrow Financial’s return on equity (ROE) reflects its superiority in utilizing shareholders’ funds over its peers. Its ROE of 13.24% compares favorably with the industry average of 11.63%.

AROW has a debt/equity ratio of 0.14, which is below the industry average of 0.23. This shows that the company will be more financially stable than its peers, even in adverse economic conditions.

Looking at its price performance, shares of the company have lost 4.4% in the past three months compared with the industry’s decline of 8.3%.

 

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Dividend Announcements by Other Finance Companies

Essent Group Ltd. ESNT announced that its board of directors sequentially hiked the quarterly cash dividend by 4.8% to 22 cents per common share. The dividend will be paid out on Sep 12 to shareholders of record as of Sep 1, 2022.

Notably, Essent Group has ample liquidity and financial flexibility, with $619 million in cash and available investment for sale, and $400 million of unused credit facility capacity. A fortified balance sheet might aid ESNT in continuing dividend payments.

The Charles Schwab Corporation SCHW declared a quarterly cash dividend of 22 cents per share, marking a 10% increase from the prior payout. The dividend was paid out on Aug 26 to shareholders of record as of Aug 12, 2022.

Apart from the dividend hike, Schwab replaced its previous share repurchase program of $1.8 billion. It is authorized to repurchase shares worth $15 billion under the new program. As of Jun 30, 2022, SCHW had 1.904 billion weighted-average common and common equivalent shares outstanding.


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