10 Updates

State Street Rewards Investors With $2.2 Billion Capital Plan

Apr 3 2014, 12:56pm CDT | by

State Street recently announced plans to buy back shares worth $1.7 billion between now and the end of March 2015, while also hiking common share dividends by 15%. Last year, the bank initiated...

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16 weeks ago

State Street Rewards Investors With $2.2 Billion Capital Plan

Apr 3 2014, 12:56pm CDT | by

State Street recently announced plans to buy back shares worth $1.7 billion between now and the end of March 2015, while also hiking common share dividends by 15%. Last year, the bank initiated the biggest share buyback in its history after getting the Federal Reserve’s approval on its plans to eliminate $2.1 billion worth of its shares from the equity market. The Fed did not have any problems clearing State Street’s capital plans this time either, given that the bank aced this year’s stress tests with the highest core Tier 1 common capital ratio figures among the 30 banks tested (see Fed Stress Test For Banks: Rationale, Results & Implications ).

We maintain our price estimate for State Street’s stock at $78 , which is about 10% ahead of current market prices.

See our full analysis for State Street here

A quick glance through State Street’s dividend payment history shows that the bank raised its dividend at least once a year between 1995 and 2001, with the frequency doubling over the period from 2001 to 2008. But as is evident from the table below, State Street does not have a great record of returning too much cash to investors. The bank handed out less than $400 million in dividends at its peak dividend rate in 2008. The numbers nearby have been taken from the bank’s annual reports (see below).

State Street’s focus on returning money to investors in recent years is demonstrated by the fact that the custody bank has repurchased almost $3.5 billion worth of shares over 2012-2013. As a direct result, the average number of its outstanding shares has fallen more than 10% from about 500 million in 2011 to under 450 million in 2013.

(in $ mil) 2007 2008 2009 2010 2011 2012 2013
Common Stock Dividends 301 399 168 20 295 463 486
Shares Repurchased 1,002 - - - 675 1,440 2,040
Total 1,303 399 168 20 970 1,903 2,526

Assuming State Street’s board approves the dividend hike starting Q2 2014, the bank will pay shareholders $0.30 per share for three quarters this year – implying dividends of $1.16 per share for the year 2014. This points to a little less than $500 million in common stock dividends for the year, if the number of shares stays constant at 430 million (though it will likely decline). That combined with the proposed $1.7 billion share buyback plan means that the bank will return $2.2 billion cash to its investors this year. While this is 12% lower than the $2.5 billion figure for 2013, it is still the second highest payout by State Street in its history.

We represent these payouts in our analysis of State Street in the form of an adjusted dividend payout rate shown in the chart below. As this payout rate was not meaningful in 2009, we represent it in the chart as 0%.

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

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Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Raky ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejecte ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hisha ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the south ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compensation ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Dat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year inv ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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