Investors Bancorp: A Buyback, A Dividend And An Upgrade

After detailing the fundamental improvements announced at its Q4 reporting Investors Bancorp, Inc. (Nasdaq: ISBC) is out with even more good news. The company announced that it has approved a 5% outstanding share buyback program, and that it is now paying a higher dividend. I believe these announcements greatly further the bull case, and should help to continue to increase ISBC's visibility to institutions and traders that frequently run scanners. I continue to recommend a long position in ISBC on all durations.Even though ISBC's dividend is not among the highest paid by its peer group, the fact that it is now throwing off higher yield is a substantial value-prop mover to buyers who were previously almost entirely dependent on share price movement: ISBC Yield To Comparable Companies
Bank:Yield: Investors Bancorp1.70% Valley National Bancorp (NYSE: VLY)4.60% BancorpSouth Inc. (NYSE: BXS)1.28% Old National Bancorp (Nasdaq: ONB)3.34% Susquehanna Bancshares (SUSQ)2.60%
The shares should have an easier time moving higher now, however, with ISBC presumably beginning its buying program soon. This should prove to be an excellent catalyst, with activist investor Blue Harbour aggregating shares as well. Couple this with a recent Barclays upgrade and a laundry list of other already in place positive price targets from analysts, and you have an excellent environment for an intra-quarter upward equity pricing lift:I hold that with shares coming out of the total float, ISBC should... Read more