Dillard's Approves Share Buyback - Analyst Blog
25 Marzo 2013 - 10:00AM
Zacks
Dillard’s Inc.
(DDS), a leading fashion apparel, cosmetics and home furnishings
retailer, recently declared that its board of directors has
approved a new share repurchase program. The new program reflects
the company’s sound financial position and well-defined future
prospects.
The new open-ended share repurchase
authorization permits Dillard’s to buy back a maximum of $250
million of its Class A shares. Under the authorization, the company
can repurchase its shares either from the open market or through
privately negotiated transactions.
The new authorization came after
the company completed its previous $250 million share buyback
program approved in Feb 2012. As of Feb 2, 2013, Dillard’s had
authorization worth nearly $92.0 million remaining under its share
repurchase program.
Dillard’s has always been committed
to creating value for its shareholders by returning capital in the
form of dividends and share repurchase program. On Feb 28, the
company declared a quarterly dividend of 5 cents per share on its
common shares, payable on May 6, 2013 to stockholders of record as
of Mar 28, 2013. Apart from this, in Dec 2012, the company paid a
special cash dividend of $5.0 per share to the shareholders’ of
record date on Dec 7, 2012.
Dillard’s strong balance sheet and
cash flow provide financial flexibility in shareholder-friendly
moves, and store and online business expansions. During fiscal
2012, it shelled out $185.5 million on share repurchases and $252.3
million on cash dividends. The company generated operating cash
flow of $522.7 million, while cash and cash equivalents stood at
$124.1 million at the end of the fiscal year.
Other companies that recently
announced new share repurchase authorizations include
Nordstrom Inc. (JWN), Discover Financial
Services (DFS), and Mondelez International
Inc. (MDLZ).
We believe that dividend payments
and share repurchases not only enhance shareholder’s return, but
also raise the market value of the stock. Through dividend
payments, companies bolster investors’ confidence, persuading them
to either buy or hold the scrip instead of selling. Looking ahead,
Dillard’s remains confident of its growth potential, suggesting
enhanced value for shareholders via dividend payout as well as
share buybacks.
DILLARDS INC-A (DDS): Free Stock Analysis Report
DISCOVER FIN SV (DFS): Free Stock Analysis Report
NORDSTROM INC (JWN): Free Stock Analysis Report
MONDELEZ INTL (MDLZ): Free Stock Analysis Report
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