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Focus Financial (FOCS) Authorizes $200M Share Repurchase Plan

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Focus Financial Partners Inc. FOCS recently announced a new $200-million share repurchase program of Class A common stock as approved by its board of directors. The company did not have any share repurchase plan or dividends in place before this.

Focus Financial, through its buyback, has reinforced the management and board of directors’ confidence in the company’s business model and long-term growth opportunities.

"The authorization will provide us with additional flexibility in our capital allocation strategy to invest in the highest return opportunities.” said Rudy Adolf, Founder, chief executive officer and chairman of Focus Financial.

The company has also reiterated its goals to invest in leading wealth management firms in the United States and international markets of strategic importance as it aims to grow its global partnership of 85 firms.

The company also targets to maintain net leverage ratio within 3.5x to 4.5x. It has reaffirmed its objective to achieve more than 20% growth in revenues and adjusted earnings before interest, tax, depreciation and amortization for 2022. Further, Focus Financial expects to achieve its 2025 objectives from continued benefits from substantial industry growth and consolidation.

Although Focus Financial has total debt worth $2.4 billion, substantially higher than its cash and cash equivalent balance of $317 million as of Mar 31, 2022, its times-interest-earned ratio of 2.5 at the end of first-quarter 2022 has improved sequentially. Further, FOCS’ net income increased by $36.6 million in the first quarter of 2022 to $39.1 million compared with the prior-year quarter.

Focus Financial is expected to efficiently deploy its capital, given its earnings strength and decent liquidity position. Through this, it will be able to enhance shareholder value.

Over the past year, shares of FOCS have lost 23%, narrower than 29.9% decline of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research


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Focus Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Other Finance Stocks Taking Similar Steps

Over the past few months, several companies have rewarded their shareholders with share buybacks. Some of these include Deutsche Bank AG DB and Capital One COF.

In April, Deutsche Bank successfully completed its €300-million share buyback program announced on Jan 26, 2022.

DB has repurchased approximately 26.5 million shares from Mar 14 to Apr 22, 2022. Further, management has proposed dividends worth €400 million with respect to 2021 financial year. Such share repurchases and dividend payments will result in a capital distribution of around €700 million for 2022.

Capital One has been meaningfully deploying capital to enhance shareholders’ value. In sync with this, the company announced additional share repurchase authorization worth $5 billion, effective from third-quarter 2022.

The authorization is in addition to the $5-billion buyback plan for this year, announced in January. COF repurchased shares worth $7.5 million in 2021.


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Focus Financial Partners Inc. (FOCS) : Free Stock Analysis Report

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