) -- Market reaction was positive following
announcement Monday that it would double its quarterly dividend payout to 10 cents a share.
The lender was featured one of
just last week.
In its announcement made after Monday's market close, the company also said its board of directors had authorized the repurchase of up to 12.6 million shares - or roughly 7% of Comerica's outstanding common stock - as well as warrants to purchase up to 11.5 million common shares.
The "represents more of a confidence boost than a valuation needle mover," according to Christopher Mutascio of Stifel Nicolaus, who pointed out in a report published after the announcement that the Comerica's dividend increase "only raises the yield to slightly over 1%."
Mutascio added that his firm believed that
were all "on the verge of similar announcements." These three holding companies were also featured among
In a company statement, Comerica's CEO Ralph Babb said "We believe we are uniquely positioned as the only bank in our peer group to have redeemed TARP and eliminated trust preferred securities from its capital structure." He also said the company would be cautious in managing its capital "until the banking industry has more clarity on regulatory targeted capital levels."
Shares closed at $36.74 Tuesday, returning 30% over the previous year. Out of 24 analysts covering Comerica, 10 rate the shares buy, 11 have hold ratings and three analysts recommend investors sell the share.
Written by Philip van Doorn in Jupiter, Fla.
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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.