Is SEI (SEIC) a Solid Growth Stock? 3 Reasons to Think "Yes"

Trinity Capital Inc. TRIN shares rose 1.8% in after-hours trading following the announcement of a new share repurchase program on Thursday.

TRIN’s board of directors authorized a share buyback plan worth $30 million. The program is set to expire earlier of either Nov. 7, 2025, or full utilization of the authorization.

The company noted that it can “take advantage of situations where the Company's management believes share repurchases would be advantageous to the Company and to its shareholders.”

Earlier, in November 2022, Trinity Capital announced a share buyback authorization worth $25 million, which expired on Nov. 11, 2023. Under this, the company repurchased 0.9 million shares at a weighted average price of $10.91.

TRIN’s Dividend Distribution History

Other than the newly announced buyback program, TRIN regularly pays dividends.

Trinity Capital is a business development company and to maintain its regulated investment company status, it is required to distribute 90-100% of its taxable income to the shareholders.

At present, TRIN pays 51 cents per share as a quarterly dividend. It hiked the dividend by 2% in March 2024. Over the last five years, the company increased its quarterly dividend 10 times, with annualized dividend growth of 18.69%.

Based on Thursday's closing price of $13.63, TRIN has a dividend yield of 14.97%. This is impressive compared with the industry’s 10.12%. The yield is attractive for income investors and represents a steady income stream.

Trinity Capital Inc. Dividend Yield (TTM)

Trinity Capital Inc. dividend-yield-ttm | Trinity Capital Inc. Quote

Sustainability of Trinity Capital’s Capital Distributions

As of Sept. 30, 2024, Trinity Capital had $228.5 million in liquidity, including $8.5 million in unrestricted cash and cash equivalents.

For the nine months ended Sept. 30, 2024, the company reported total investment income of $166.9 million, which improved 24.5% year over year. On the other hand, net investment income per share of $1.54 declined 7.2% because of a jump in interest expense and other debt financing costs.

Nonetheless, given a robust liquidity position and decent earnings strength, the company is expected to continue with efficient capital distribution activities.

Shares of this Zacks Rank #3 (Hold) company have lost 5.5% in the past three months against the industry’s growth of 4.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar Steps by Other Finance Firms

Comerica Incorporated’s CMA board has approved an additional share repurchase authorization of up to 10 million shares of its outstanding common stock, with no expiration date. This new authorization is in addition to the 5 million shares available as of Sept. 30, 2024, under the prior share repurchase program.

In the fourth quarter of 2024, CMA plans to repurchase approximately $100 million shares.

SEI Investments Company SEIC approved a $400 million increase in its stock repurchase program in October 2024, bringing the total available authorization to approximately $429 million.

This includes the $29 million remaining under SEIC’s existing share repurchase authorization.

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SEI Investments Co. SEIC has entered into a strategic partnership with Close Brothers Asset Management (“CBAM”) to power the latter’s operational growth and transformation.

Details of SEIC’s Collaboration

SEI Investments was chosen after an extensive, multi-stage evaluation process that included numerous providers. This strategic collaboration between SEI Investments Europe Ltd., SEIC’s wholly-owned UK subsidiary, and CBAM will provide the latter with advanced, integrated technology and services, such as data integration, migration and orchestration, to aid its delivery towards strategic goals.

SEIC will offer CBAM access to its SEI Wealth Platform and SEI Data Cloud, to gain real-time data and analytics and leverage a fully integrated technology and operational outsourcing solution to enhance CBAM’s capabilities.

Further, per the agreement, SEI Investments will offer employment to several CBAM employees in its SWP Operations team and both entities will collaborate closely to ensure a successful and smooth transition.

Jim London, CEO of SEI Investments Europe Limited, said, “CBAM is a leading UK wealth manager dedicated to delivering an end-to-end, modern wealth management experience for their clients. We're thrilled to partner with CBAM and to provide access to the full breadth of SEI's integrated technology, data, and operations solutions that can help them achieve their growth aspirations.”

This move aligns with SEIC’s growth strategy. This September, the company announced the integration of investment vehicles from KKR & Co. into its platform to enhance users’ accessibility to private markets. Further, in July, the company announced an enhanced integration with Canoe Intelligence to boost operational efficiency for family offices via the SEI Archway Platform.

Zacks Rank & Price Performance of SEI Investments

Year to date, shares of SEI Investments have risen 25.9% compared with the industry’s 30.9% growth.

Currently, SEIC sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Finance Firms Worth Considering

A couple of other top-ranked bank stocks are Northern Trust Corporation NTRS and Comerica Incorporated CMA.

The Zacks Consensus Estimate for NTRS has been marginally revised upward for 2024 over the past week. The stock price has increased 24.5% over the past six months. NTRS currently sports a Zacks Rank #1.

Earnings estimates for CMA have been revised marginally upward for the current year over the past week. In the past six months, CMA’s shares have risen 30.5%. Presently, CMA carries a Zacks Rank #2 (Buy).

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Comerica Incorporated’s CMA board has approved an additional share repurchase authorization of up to 10 million shares of its outstanding common stock, with no expiration date. This new authorization is in addition to the five million shares available as of Sept. 30, 2024, under the prior share repurchase program.

In the fourth quarter of 2024, Comerica plans to repurchase approximately $100 million worth of shares as part of its repurchase program.

Comerica’s Consistent Quarterly Dividend Payout

The bank also announced a quarterly cash dividend of 71 cents per share. The dividend will be paid out on Jan. 1, 2025, to its shareholders of record as of Dec. 13, 2024.

In February 2023, the company hiked its quarterly dividend by 4.4% to 71 cents per share. It has increased its dividend payout twice in the past five years and has a payout ratio of 50%. Considering yesterday’s closing price of $63.28, CMA’s dividend yield is currently pinned at 4.49% compared with the industry’s average of 3.4%. These steady capital distribution activities will help in further enhancing shareholder confidence in the stock.

Comerica Incorporated Dividend Yield (TTM)

Comerica Incorporated dividend-yield-ttm | Comerica Incorporated Quote

Similarly, other finance stocks like SEI Investments Company SEIC approved a $400 million increase in its stock repurchase program in October 2024, bringing the total available authorization to approximately $429 million. This amount includes the $29 million remaining under SEIC’s existing share repurchase authorization.

In the same month, Federated Hermes, Inc. FHI also authorized an additional share repurchase authorization of five million shares, with no expiration date. FHI’s existing repurchase program, approved in October 2023, had approximately 1.2 million shares remaining as of Sept. 2024.

CMA’s Strong Liquidity to Aid Capital Distribution

The bank has a solid liquidity profile. The company’s total liquidity capacity was $44.1 billion as of Sept. 30, 2024. Further, it also has a $16.8 billion capacity remaining in its discount window. As of the same date, the company’s total debt (comprising short-term borrowings, and medium and long-term debt) aggregated $6.9 billion, which was significantly lower than its liquidity.

It also has a strong capital position with a total capital ratio of 14.3% and a Common Equity Tier 1 capital ratio of 11.97%.

CMA’s strong liquidity and solid balance sheet position are likely to help sustain its capital distributions in the long run.

Comerica’s Price Performance

In the past three months, CMA shares have gained 22.5% compared with the industry’s growth of 14.3%.