Is Raymond James' Capital Distribution Policy Sustainable?

Core Insights - Raymond James Financial (RJF) has a strong capital distribution strategy focusing on dividend increases and share repurchases while maintaining financial flexibility for growth [1][5] - The company has consistently raised its dividend over the past decade, with an 11.1% increase announced in December 2024, resulting in a 5-year annualized dividend growth rate of 18.1% [1][11] - RJF has a share buyback plan authorized for up to $1.5 billion, with $749 million remaining as of June 30, 2025 [2][11] - The company has engaged in opportunistic acquisitions, supported by a robust balance sheet and liquidity position, with $2.89 billion in senior notes payable and $9.20 billion in cash and cash equivalents as of June 30, 2025 [3][11] - RJF holds strong credit ratings (A- from Fitch and S&P, A3 from Moody's) and a stable outlook, facilitating access to debt markets [4] Capital Returns Compared to Peers - Morgan Stanley (MS) has also demonstrated impressive capital distribution, with an 8% dividend hike to $1.00 per share and a multi-year share repurchase program of up to $20 billion [6][7] - MS has increased its dividend five times in the last five years, with an annualized growth rate of 22.8% [7] - Evercore (EVR) has committed to enhancing shareholder value, raising its dividend by 5% to 84 cents per share in April 2025, with a compound annual growth rate of 10.4% over the last six years [8][9] - EVR has a share repurchase program worth $1.6 billion authorized in April 2025, with $2.6 billion worth of shares available as of June 30, 2025 [9] Price Performance - RJF shares have gained 13.1% year-to-date, underperforming the industry's growth of 30.6% [10]