Fidelity National Information Services (FIS) has regularly rewarded its shareholders through dividends and share buybacks. For 4Q16, it announced dividends of $0.29 per share, which is 12.0% higher on a year-over-year basis. That translates to a dividend yield of 1.3% on an annualized basis.
The company’s dividend yield is competitive compared to its peers (XLF). Its closest rival, Fiserv (FISV) (EFX), doesn’t currently pay dividends. In comparison, Jack Henry & Associates (JKHY) has a dividend yield of 1.3%.
During 4Q16, FIS returned $86.0 million to its shareholders in dividends. In 2016, it paid dividends of ~$.10 per share and returned $341.0 million to shareholders in dividends and share buybacks.
Share repurchase plans
FIS increased its share repurchase authorization to $2.0 billion in 2014, which reflects the company’s confidence in its current valuations as well as its long-term prospects. That replaces its existing $1.0 billion share repurchase plan and is effective until December 2017.
However, since the acquisition of SunGard, the company plans to suspend its share repurchase program in order to lower the company’s leverage ratio. SunGard has almost tripled FIS’s debt ratio, while its ability to generate cost and revenue synergies still remains to be seen.