Asta Funding Stock Higher on Special Dividend –The Move Signals Stable Cash Positions

Asta Funding Dividends

Asta Funding (NASDAQ:ASFI) announced a special dividend of $5.20 per share payable on February 28, 2018. The aggregate payment of the dividends will be $35 million. Previously, the company had paid a special dividend in 2012.

This decision to return the cash to investors signals its stable cash position to cover the capital requirements.

The special dividend of $5.30 a share had represented 74% of its stock price of $7.20 per share on February 2, 2018. The special dividend means that the company has returned 74% of investor’s initial investment in Asta Funding stock.

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“This dividend provides an immediate benefit to our stockholders while allowing us to remain well positioned for future growth with ample liquidity for select investment opportunities,” said Gary Stern, Chairman, President, and Chief Executive Officer.

ASFI shares grew 37% in Tuesday trade to $9.90 per share, down slightly from a 52-week high of $10.35. The stock traded in the range of $6.15 to $10.35 in the last 52-week.

Lower financial numbers kept Asta Funding stock under pressure last year. Before the latest rally, ASFI share price traded in the range of $7 in the last six months.

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On the positive side, Asta Funding’s investment in new businesses continues to offset lower sales from its personal injury section. The company had recently invested almost $27.5 million in personal injury claims and $89 million in structured settlements.

Its disability segment revenue grew to $3.9 million in the past three quarters, up from $2.7 billion in the same period last year.  Moreover, Asta Funding management has declined year over year operating expense of this segment by $1 million in the last quarter.

On the other hand, the company appears in a position to support investments in growth opportunities along with returning cash to investors. It had $22.1 million in cash and cash equivalents at the end of the latest quarter.

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