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You know that buying a stock makes you part owner of a company, theoretically with millions of other people. But, while ownership has its privileges (at minimum you get a neat stock certificate and an invitation to the annual meeting), being an owner doesn't necessarily pay. Sure, you make money if the stock goes up, but only if you sell, and you can, in theory, lose all the value of your investment if the stock tanks.
Enter the dividend. Here, you get money simply from holding the stock. Companies pay a yield, which is expressed in a percentage based on the stock's price. For example, if a stock trades at $10, and pays a 10% annual yield, your dividend payment would be a $1. (Usually, companies break out the payments quarterly, so, using our example, you¿d get, well, a quarter each quarter.)
Companies that pay dividends fall into a few categories. First, you've got your big, stable companies that generate enough cash that it makes sense to throw some back to shareholders. Next, there are businesses, like real estate investment trusts, that are in the business of sitting back and receiving cash, then distributing it to holders. And, then there are companies that need to dangle a high dividend yield like a carrot to ease investor fears. Cigarette-maker Altria has been doing this for years.
Simply because a company pays a dividend doesn't make it a good investment. After all, you may want to take a chance on a growth stock that can move higher in price than dividend payers are known to do. But, you can¿t beat the safety of knowing that, even if a stock doesn't move in a year, you¿re at least making something off your investment.
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Friday, June 27, 2008
Bank of the Carolinas Corporation Announces Stock Repurchase Plan
Comtex
MOCKSVILLE, N.C., June 27, 2008 /PRNewswire-FirstCall via COMTEX/ ----Bank of the Carolinas Corporation (Nasdaq: BCAR) ("Company") announced today that the Company's Board of Directors has authorized the Company to repurchase up to 398,737 shares, or 10%, of the Company's outstanding common stock during the year following the Board's action. Under the program, repurchases may be made from time to time by the Company in the open market, in block purchases, or in solicited or unsolicited privately negotiated transactions in accordance with Securities and Exchange Commission (SEC) rules and subject to factors such as market price, the Company's operating results and available cash, general economic and market conditions, and other conditions.
In conjunction with the share repurchase authorization, the Board also authorized the Company to adopt a stock trading plan in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934. Rule 10b5-1 allows public companies to adopt written, pre-arranged stock trading plans when they are not in possession of material, non- public information. The adoption of the stock trading plan will allow the Company to repurchase its shares during periods when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods. The Board's action approving share repurchases does not obligate the Company to acquire any particular amount of shares, and it may be suspended or discontinued at any time at the Company's discretion. Any shares of stock repurchased by the Company will be cancelled.
"We believe that our stock represents an attractive investment opportunity for the Company and our shareholders," commented Robert E. Marziano, the Company's Chairman, President and Chief Executive Officer. "We believe the repurchase program will help create shareholder value through the efficient use of our capital while still allowing Bank of the Carolinas to take advantage of growth opportunities in our banking markets. It also reflects our strong belief in the long-term opportunities for the Company."
Sandler O'Neill & Partners, L.P. will execute the share repurchase program for the Company.
This press release may contain, among other things, certain forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of our goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "projects," "outlook" or similar expressions. These statements are based upon the current belief and expectations of our management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond our control).
CONTACT:
Michelle Clodfelter, Principal Financial Officer, or Joy Chaffin, Shareholder Relations, both of Bank of the Carolinas Corporation, 1-336-751-5755
SOURCE Bank of the Carolinas Corporation
Copyright (C) 2008 PR Newswire. All rights reserved
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