For years, Leucadia National was a highly diversified conglomerate, bringing together not only well-known financial services companies but also meat processing giant National Beef. Yet recently, the company realized it wanted to focus on its Jefferies subsidiary, and so it decided to change its name to Jefferies Financial Group (NYSE:JEF) and sell off a substantial portion of its holdings of National Beef.

Coming into its second-quarter financial report, investors were curious to see what Jefferies would look like after its recent strategic moves. The company's results were solid, but many investors focused on a couple of capital allocation decisions it made that could have a profound impact on the stock over time.

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Jefferies' first results as its own company

Jefferies Financial Group's second-quarter financial results showed the continued success of that portion of Leucadia's old business. Revenue climbed 6% to $911.2 million, accelerating from the segment's pace of growth in the first quarter of 2018. Net income soared to $725.5 million, and that produced earnings of $2.03 per share, easily beating the $1.88 consensus forecast among those following the stock.

A closer look at what's under Jefferies' corporate umbrella can shed light on what's working for the company right now. The primary Jefferies Group LLC unit, which makes up about 90% of revenue, saw good results from its investment banking division, which enjoyed a more than 40% jump in sales compared to the previous year's second quarter. The fixed income portion of that business struggled, but equities were relatively consistent with year-ago performance.

Berkadia also contributed to Jefferies' overall success. The debt-origination business provided $6 billion in financing for clients during the second quarter, up by 25% from last year, and investment sales were also higher. Despite some tough conditions in the commercial mortgage-backed securities market, Berkadia has sustained its servicing portfolio near current levels.

Elsewhere, Jefferies expanded its asset management business by joining up with Weiss Multi-Strategy Advisors in a collaboration, as well as partnering with the newly combined businesses of Schonfeld Strategic Advisors and Folger Hill Asset Management. Vitesse Energy Finance kept working in the Bakken shale play, while positions in Spectrum Brands and Idaho Timber had relatively small impacts on Jefferies' overall performance.

The sale of a 48% stake in National Beef generated $1.1 billion in cash, and that prompted the company to take steps to consider additional return of capital. Even after the sale, Jefferies will still own a 31% interest in National Beef, and solid performance in the beef and cattle industry made a positive contribution to Jefferies' financial results.

What Jefferies is doing now

Jefferies CEO Rich Handler and President Brian Friedman focused on what the company has done with its spare cash. "We repurchased a total of over 24 million of our outstanding shares (7%) at an average price of $24.17 per share," Handler and Friedman said, "or a total of $582 million returns to shareholders in the second quarter." The CEO and president also noted the many milestones the company passed during the period, including the sale of its interest in Garcadia and the company's renaming.

But Jefferies isn't stopping there. The company said it will allow repurchase of another 25 million shares, potentially further reducing the outstanding share count by roughly 7%. At the same time, Jefferies boosted its dividend by 25% and will now pay $0.125 per share on a quarterly basis. By doing so, Jefferies is making it clear that it wants to give back to its investors even as it cashes out some of what it now considers its non-core assets.

Shareholders were happy with the report, and the stock jumped 7% on the day following the announcement before giving back ground over the ensuing week. With its new focus, Jefferies Financial Group aims to maintain the strong track record Leucadia put together, and it has a good chance of succeeding if it keeps following its current strategic vision.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Jefferies Financial Group Inc. The Motley Fool has a disclosure policy.