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Jefferies (JEF) Rewards Investors With Additional Buybacks

Zacks Equity Research

Jefferies Financial Group Inc. JEF recently announced an additional share repurchase authorization. The company’s board of directors has given approval for increasing the buyback program of $250 million.

This will increase Jefferies Financial’s existing authorization of nearly 2.8 million shares. The development cheered investors, with the company’s share price increasing almost 2% from the prior day’s closing.

Notably, Jefferies Financial has repurchased roughly 7 million shares for $152 million during the first two months of first quarter fiscal 2020. Moreover, during fiscal 2019, it had repurchased 25.9 million shares for $506 million.

Additionally, Jefferies Financial continues to hike quarterly dividend on a regular basis. The last hike was announced in January, with 20% increase to 15 cents per share. Prior to that, the company hiked dividend by 25% in July 2018.

Jefferies Financial remains committed toward enhancing shareholder value, as evident from its involvement in meaningful capital deployment activities. During the last two fiscal years, the company returned more than $2.4 billion to shareholders through share buybacks and dividends.

The company is well positioned for growth, driven by an improving economy, high corporate cash balance and restructuring activities across Europe. However, increasing operating expenses, mainly due to rise in compensation and benefit costs, are likely to hurt its bottom-line growth to some extent.

Over the past year, shares of the company have gained 6.3%, underperforming 10.5% rally of the industry it belongs to.



Currently, Jefferies Financial carries a Zacks Rank #5 (Strong Sell).

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 authorization over the past three months are BancorpSouth Bank BXS, Civista Bancshares Inc. CIVB and Stifel Financial Corp. SF. BancorpSouth authorized a new share repurchase program of up to 8 million shares, while Civista Bancshares announced authorization to buy back up to 672,000 shares. Further, Stifel announced an increased to its share repurchase authorization to 10 million shares.

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