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U.S. Global Investors (NASDAQ:GROW), part of the financial sector, has provided an update to its stock repurchase program. The updated program allows the company to purchase up to $5 million worth of its stock, which equates to 14% of its market capitalization. This repurchase program will be in effect from September 13, 2024, through December 31, 2024.
Stock Repurchase Details
The stock buyback is designed to manage excess capital, as confirmed by the company. U.S. Global Investors will repurchase shares at or below the previous day’s closing price, or if the stock trades below a certain level. Additionally, the company may purchase blocks of up to 100,000 shares on a downtick, usually at the bid or below.
This strategy aims to reduce the number of outstanding shares, which can result in an increase in earnings per share (EPS) and greater ownership value for shareholders.
Dividend Payments Announced
Alongside the buyback program, U.S. Global Investors’ board has approved a monthly dividend of $0.0075 per share. These payments are scheduled to begin in October 2024 and continue through December 2024. Based on the closing price of $2.54 on September 18, 2024, this dividend represents a 3.54% yield on an annualized basis.
Performance of Gold in the Market
In its statement, U.S. Global Investors also highlighted the recent performance of gold, an important asset to many of the company’s investments. Gold has risen to approximately $2,500 per ounce and is currently trading above its 50-day moving average. This trend is often viewed as a positive signal by market participants.
The company noted the historical relationship between gold and Treasury yields, pointing out that the yield on the 10-year Treasury note has dropped to a 52-week low of 3.6%, while trading below its 200-day moving average.
