Virtus Investment (VRTS) Cheers Investors With 15.2% Dividend Hike
Virtus Investment Partners, Inc. VRTS has followed through with its previous dividend hike plans and raised its quarterly cash dividends by 15.2%. The company will now pay out a dividend of $1.90 per share, up from the $1.65 disbursed in the prior quarter. The third-quarter 2023 dividend will be paid out on Nov 15 to shareholders of record as of Oct 31, 2023.
Based on the Aug 17 closing price of $200.61, Virtus Investment's annual dividend yield post the dividend hike will stand at 3.79%.
Prior to the recent hike, the company had increased its dividend by 10% in August 2022. VRTS raised its quarterly dividend six times in the last five years. Also, it has a five-year annualized dividend growth of 34.5%. Currently, the company's payout ratio is 32% of earnings.
George R. Aylward, president and CEO of VRTS, commented, "We are pleased to raise our dividend for the sixth consecutive year, reflecting the strong free cash flow generated by the business and the flexibility of our balance sheet to support our capital priorities. Returning capital to shareholders is an important element of our capital management strategy, alongside investing in the growth of the business and maintaining appropriate levels of leverage."
Apart from the regular dividend payments, VRTS has a share repurchase program in place. In 2010, the company announced a new repurchase program, under which, it authorized to repurchase 5,680,045 shares. In second-quarter 2023, Virtus Investment repurchased 51,840 shares. As of Jun 30, 2023, the plan had nearly 776,512 shares remaining under the repurchase authorization.
Supported by its solid assets under management balance as of Jun 30, 2023, and decent capital position, the company is expected to continue with efficient capital deployment activities. Through this, Virtus Investment will keep enhancing shareholder value.
Over the past three months, shares of VRTS have gained 9.3% compared with the industry’s upside of 6.9%.
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Virtus Investment currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Companies Taking Similar Steps
Over the past month, Bank OZK OZK and The PNC Financial Services Group, Inc. PNC announced increases in their quarterly dividend payouts.
Bank OZK announced a dividend hike yet again. It declared a quarterly cash dividend of 36 cents per share, reflecting a rise of 2.9% from the prior payout. The dividend was paid out on Jul 21 to shareholders of record as of Jul 14, 2023.
This marks 52 consecutive quarters of dividend hikes by Bank OZK. Prior to this, OZK raised its dividend 2.9% to 35 cents per share in April 2023. We believe that such disbursements highlight the company’s operational strength and commitment to enhancing shareholders' wealth.
After passing the 2023 stress test, PNC Financial announced that it expected its Stress Capital Buffer ("SCB"), effective from Oct 1, 2023, to decrease to 2.5% from 2.9%.
With a lower SCB, a company typically has higher flexibility to deploy capital in share buybacks and dividends. Accordingly, PNC announced a hike in its quarterly dividend. The company declared a quarterly cash dividend of $1.55 per share, marking an increase of 3.3% from the prior payout. The dividend was paid out on Aug 5 to shareholders of record as of Jul 17, 2023.
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