Spending cash on share buy-backs boosts earningspershare immediately, whereas a capital-investment programme may actually reduce earnings in the short term.
We looked for companies that had both quarterly and annual reductions in outstanding shares, a price-to-earnings ratio of less than 25, three-year earningspershare growth of more than 15% and debt to total capital of less than 30%.
The Fed will gather data from big banks and determine if they have enough capital to pay out dividends to goose their stocks higher, or enough capital to repurchase stock so higher earnings-per-share metrics makes them attractive.
Given the current economic climate--higher unemployment, slower retail sales--Capital One says it's still on target for 20% earningspershare growth in 2002.