Banks up dividends, stock buyback plans
Recently freed from regulators’ coronavirus restrictions, the largest U.S. banks on Monday announced plans to return tens of billions of dollars to their shareholders over the next year in the form of dividends and stock buybacks.
It’s a signal that banks are looking to reward their shareholders after last year’s pandemic-driven losses. But it’s also a sign banks at the moment see few places to put their big profits other than back into the hands of their shareholders.
Bank of America said it plans to raise its dividend by 17% to 21 cents per share, continuing its $25 billion stock buyback. Truist, the bank that was made when BB&T and SunTrust merged, said it planned to raise its dividend to 48 cents per share from 45 cents per share.
Morgan Stanley said it would double its quarterly dividend, from 35 cents per share to 70 cents per share, with payouts expected to start in the third quarter. The bank will also buy back $12 billion worth of its outstanding shares over the next year.
JPMorgan Chase said it planned to increase its quarterly dividend to $1 per share, up from 90 cents. The bank said it plans to continue its $30 billion stock buyback plan that was announced late last year. JPMorgan is expected to post earnings of about $40 billion this year.
S&P 500 hits record high
Most U.S. stocks edged lower on Monday, but strength for several big tech companies nudged indexes a bit further into record heights.
The S&P 500 added 0.2% after bouncing between small gains and losses through the morning. The index is coming off its best week since February as optimism builds about the strengthening economy and expectations that the Federal Reserve will keep interest rates low for a while longer.
Facebook was among the tech winners, gaining 4.2% after a federal judge dismissed antitrust lawsuits brought against it by the Federal Trade Commission and a coalition of state attorneys general.
Mastercraft OKs stock repurchase program
MasterCraft Boat Holdings, Inc. announced Monday it plans to repurchase up to $50 million of its common stock over the next three years after the Vonore, Tennessee-based boat builder said it has completed a new $160 million credit facility, consisting of a $60 million term loan and a $100 million revolving credit facility.
The new debt arrangement will provide MasterCraft with additional liquidity and financial flexibility, according to company CEO Fred Brightbill.
“MasterCraft maintains a disciplined and thoughtful approach to capital allocation, and the Board’s authorization of a share repurchase program reflects the confidence we have in our company, our growth strategy, our comprehensive portfolio of brands, and our ability to execute on what we believe to be a tremendous opportunity before us,” he said.
Court blocks suit over coal exports
The U.S. Supreme Court decided Monday that it won’t allow Wyoming and Montana to sue Washington state for denying a key permit to build a coal export dock that would have sent coal to Asia.
Justices Clarence Thomas and Samuel Alito voted in the minority in the ruling against letting the two states sue the third in a case that would have gone directly before the high court.
The two major coal mining states have sought to boost exports to prop up an industry in decline for a decade as U.S. utilities switch to gas-fired power and renewable energy.
The Washington state Department of Ecology in 2017 denied a permit for the export dock, saying the facility on the Columbia River would cause “irreparable and unavoidable” environmental harm.
Denying the permit violated the U.S. Constitution’s prohibition against trade protectionism between states, the coal states argued in 2020.
Washington state officials were not trying to block Wyoming and Montana coal but acted because of “valid environmental concerns” about the dock, attorneys for the state argued in a court filing later that year.
— Compiled by Dave Flessner