U.S. Global Investors Announces a Substantial Increase in February’s Stock Buybacks Compared to Last Year, Continuation of Monthly Dividends for Past 13 Years
- Significant increase in share repurchases by U.S. Global Investors, Inc. with 102,636 shares bought in February 2024 at a net cost of $281,000.
- Board raised the buyback program limit to $5 million, indicating confidence in the company's future prospects.
- Monthly dividends of $0.0075 per share approved from April to June 2024, offering a 3.45% yield.
- Total shareholder yield for the company was 7.9% in 2023, exceeding the yield on the 10-year Treasury.
- Gold prices hit a new all-time high, benefiting the gold mining industry.
- U.S. Global Investors' smart beta thematic funds focus on gold-related investments, using a quantitative approach to screen companies.
- None.
Insights
The buyback of shares by U.S. Global Investors signifies a strategic use of capital with the intention to create shareholder value. A share repurchase typically indicates that the company believes its stock is undervalued and is a positive signal to the market. The substantial increase in the number of shares repurchased compared to the previous year suggests a strong confidence in the company's financial health and future prospects. Analyzing the financial implications, the buyback could potentially lead to earnings per share (EPS) accretion, as fewer shares outstanding may result in higher EPS if net income remains stable or grows.
Moreover, the continuation of monthly dividends indicates a commitment to returning value to shareholders. The annualized dividend yield of 3.45% is competitive, particularly when compared to the yield on the 10-year Treasury, highlighting the attractiveness of the stock to income-focused investors. However, investors should consider the sustainability of these dividends in relation to the company's earnings and cash flow.
The mention of gold reaching a new all-time high is a significant factor for U.S. Global Investors, especially given their specialized sector focus. Gold prices are often seen as a safe-haven asset in times of economic uncertainty and can inversely correlate with real interest rates. Expectations that the Federal Reserve may ease monetary policy could decrease real interest rates, making gold more attractive. This scenario could benefit the company's gold-related funds, particularly the gold royalty and streaming ETF, which is likely to see an increase in valuation and interest from investors seeking exposure to precious metals.
The company's Smart Beta 2.0 thematic funds strategy is noteworthy as it merges passive and active investment approaches. By not solely relying on market capitalization for company ranking, the strategy aims to identify undervalued companies with strong financial metrics, potentially offering a more robust investment thesis than traditional index funds.
San Antonio, TX, March 07, 2024 (GLOBE NEWSWIRE) -- U.S. Global Investors, Inc. (NASDAQ: GROW) (the “Company”), a registered investment advisory firm with longstanding experience in global markets and specialized sectors, today is pleased to announce that it repurchased 102,636 of its own shares in February 2024, at a net cost of approximately
As a reminder, the Board of Directors (the “Board”) modified the Company’s buyback program in February 2022, increasing the annual limit from
“U.S. Global Investors is committed to enhancing shareholder value, and buying back our own stock is just one way that demonstrates our strategic approach to capital allocation. It also showcases our confidence in the Company’s future prospects,” says Frank Holmes, the Company’s CEO and Chief Investment Officer. “We believe GROW is deeply undervalued right now, and we will continue buying as small-cap stocks remain under pressure from higher borrowing costs.”
Continuation of Monthly GROW Dividends
The Company’s Board of Directors (the “Board”) approved payment of the
At the February 29, closing price of
“We maintain a high conviction in sharing own shareholder yield because we believe focusing on dividends or buybacks alone fails to give investors the full picture,” says Mr. Holmes. “I urge readers interested in learning more to check out Mebane Faber, co-founder of Cambria Investment Management and author of Shareholder Yield: A Better Approach to Dividend Investing. A strong advocate for shareholder yield, Faber has shown numerous times that the strategy works in multiple industries.”
Gold at New All-Time High
The Company is also pleased to report that the price of gold has recorded a new record high in intraday trading as of March 5, 2024, on investor hopes that the Federal Reserve may begin easing monetary policy later this year.
“This is very constructive news for the gold mining industry, which will see higher revenues as a result of these prices,” says Mr. Holmes.
Gaining Exposure with Smart Beta 2.0 Thematic Funds
U.S. Global Investors is a pioneer in the gold industry, launching the very first no-load gold mutual fund in 1974. The Company currently offers two gold-related mutual funds and one exchange-traded fund focused on precious metal mining.
“The run-up in gold is specifically beneficial to our gold royalty and streaming ETF, since it focuses on companies that generate over
About U.S. Global Investors, Inc.
The story of U.S. Global Investors goes back more than 50 years when it began as an investment club. Today, U.S. Global Investors, Inc. (www.usfunds.com) is a registered investment adviser that focuses on niche markets around the world. Headquartered in San Antonio, Texas, the Company provides investment advisory services to U.S. Global Investors Funds and U.S. Global ETFs.
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All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. There is no guarantee that the funds will declare dividends in the future or that, if declared, will remain at current levels or increase over time. The shareholder yield is a ratio that shows how much money the company is sending back to shareholders through a combination of dividends and share repurchases. Smart beta 2.0 combines the benefits of passive investing and the advantages of active investing strategies. Quant investing, or quantitative analysis, is the use of statistical models in investment management.
[1] The Company computes shareholder yield by adding the percentage of change in shares outstanding to the dividend yield for the 12 months ending September 30, 2023. The Company did not have debt; therefore, no debt reduction was included.
Attachments
- Gold Trading at a New All-Time High
- GROW Has Bought Back 1 Million of Its Own Shares Since Program Was Enchanced
FAQ
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