LOS ANGELES - Cathay General Bancorp (NASDAQ:CATY), the parent company of Cathay Bank, has announced the adoption of a new share repurchase program. Under this program, the company has been authorized to buy back up to $125 million of its common stock. This new initiative follows the completion of the previous repurchase scheme, which concluded on February 21, 2023, after the company bought back 2,897,628 shares at an average price of $43.14 each.
The company has outlined that repurchases may occur in the open market or through privately negotiated transactions, contingent on market conditions, applicable legal requirements, and other factors. Management retains the discretion to decide the specifics of the buyback, including timing, volume, and pricing. The company may also engage in repurchases under a Rule 10b5-1 plan, which would permit stock buybacks at times when they might otherwise be restricted due to insider trading regulations.
The newly announced repurchase program can be modified, suspended, or terminated at any time, based on a variety of factors such as market conditions, the cost of repurchasing shares, alternative investment opportunities, liquidity, and other considerations deemed relevant by the company. These factors may also influence the timing and quantity of the shares repurchased. As of the announcement, Cathay General Bancorp has approximately 72.8 million shares of common stock outstanding.
Cathay General Bancorp, founded in 1962 and headquartered in Los Angeles, is a publicly traded company that operates as the holding company for Cathay Bank. The bank offers a wide array of financial services and has a presence that spans over 60 branches across the United States, as well as overseas locations in Hong Kong and representative offices in Beijing, Shanghai, and Taipei.
InvestingPro Insights
Cathay General Bancorp (NASDAQ:CATY) has shown a commitment to shareholder returns, as evidenced by their new share repurchase program and a history of maintaining dividend payments for 34 consecutive years. Notably, the dividend yield as of the latest data stands at an attractive 3.79%. This dedication to shareholder value may interest investors looking for stable income.
InvestingPro Tips reveal that while analysts have revised their earnings downwards for the upcoming period and anticipate a drop in net income this year, the company is still predicted to be profitable. In fact, Cathay General Bancorp has been profitable over the last twelve months. The company's ability to sustain profitability, even amidst challenging conditions, could be a reassuring sign for investors.
On the financial metrics front, the company's P/E ratio is currently at 7.87, which might suggest an undervaluation compared to industry peers, especially when considering the company's robust operating income margin of 63.69% for the last twelve months as of Q1 2024. However, the PEG ratio stands at -0.64, which may indicate concerns about future earnings growth relative to the current P/E ratio. Additionally, the Price / Book ratio is at 0.95, potentially pointing to a stock that is reasonably valued in terms of its assets.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that could provide further insights into Cathay General Bancorp's financial health and market position. Utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, where you can access these valuable tips and metrics to inform your investment decisions.
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