Will Global Weakness Hit JPMorgan's 1Q16 Earnings?
Dividends
JPMorgan Chase (JPM) has regularly rewarded its shareholders through dividends and share buybacks. For 4Q15, it announced dividends of $0.44 per share, flat on a quarterly basis but 10% higher than 1Q15. This translates to a dividend yield of 3.0% on an annualized basis based on its closing price of $59.89 on Friday, April 1, 2016.
The company’s dividend yield has remained at par with other banking players that constitute 48% of the Financial Select Sector SPDR ETF( XLF) (KBE).
In 2015, the company paid dividends of $1.72 per share and repurchased $4.5 billion worth of common stock.
Share repurchase plans
JPMorgan increased its share repurchase authorization to $1.9 billion in March 2016. This reflected the company’s increased confidence in its current valuation as well as its long-term prospects. This is in addition to the company’s share buyback authorization of $6.4 billion last year.
In 4Q15, the company repurchased ~19 million shares for $1.2 billion at an average price of $63.92. Since the commencement of its $6.4 billion capital redistribution plan in March 2015, JPMorgan has purchased 89.8 million shares of its common stock for an aggregated cost of $5.6 billion.
Other banks returning capital to shareholders by repurchasing shares include Bank of America (BAC), Capital One Financial (COF), and Wells Fargo (WFC).
In the final part of our series, we’ll see why analysts are optimistic about JPMorgan.
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