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These 3 Companies Can't Get Enough of Their Own Stock
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Stock buybacks, also regularly known as share repurchase programs, are a common strategy we see implemented by companies.
There are several reasons companies elect to buy back their stock; they’ve decided to utilize excess cash, they want to limit dilution caused by employee stock option programs, or simply because they believe their shares are undervalued.
Three companies – Chevron (CVX - Free Report) , Kinder Morgan (KMI - Free Report) , and Agilent Technologies (A - Free Report) – have all announced repurchase programs in 2023. Below is a chart illustrating the performance of all three over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at how each one stacks up.
Chevron
Chevron is one of the world's largest publicly traded oil and gas companies, with operations that span almost every corner of the globe. Yesterday, the company announced a sizable $75 billion share repurchase program.
The recent surge in energy prices has benefitted the company in a big way; CVX reported free cash flow of a steep $12.3 billion in its latest quarter, good enough for a 16% sequential uptick and an 84% Y/Y increase.
As we can see in the chart below, Chevron has been a cash-generating machine.
Image Source: Zacks Investment Research
In addition, the company’s dividend is in decent shape, currently yielding 3.2% annually paired with a sustainable payout ratio sitting at 33% of its earnings.
Image Source: Zacks Investment Research
Most importantly, the company is scheduled to release quarterly results tomorrow, January 27th, before the market open. Currently, the Zacks Consensus EPS Estimate of $4.16 suggests a 62% Y/Y increase in earnings.
And our consensus revenue estimate stands firm at $52.3 billion, suggesting an improvement of nearly 9% from the year-ago quarter.
Image Source: Zacks Investment Research
Kinder Morgan
Kinder Morgan is a leading midstream energy infrastructure provider in North America. Earlier in the year, KMI increased its previously authorized $2 billion stock buyback to $3 billion.
An increase in energy prices has helped Kinder Morgan increasingly reward its shareholders; KMI’s dividend payout grew nearly 3% over the last year, currently yielding a steep 6% annually.
Image Source: Zacks Investment Research
Impressively, last year marked the fifth consecutive year of increased payouts.
Image Source: Zacks Investment Research
Agilent Technologies
Agilent is an original equipment manufacturer (OEM) of a broad-based portfolio of test and measurement products serving multiple end markets. Currently, the company sports the highly-coveted Zacks Rank #1 (Strong Buy).
On January 9th, Agilent approved a fresh $2 billion share repurchase program.
Agilent has reported strong results as of late, exceeding the Zacks Consensus EPS Estimate by double-digit percentages in back-to-back releases. Just in its latest print, the company posted a 10% EPS beat and reported sales nearly 5% above expectations.
Image Source: Zacks Investment Research
The company does pay a dividend, currently yielding a modest 0.6%. Still, while the yield may be on the lower end of the spectrum, Agilent’s 8.6% five-year annualized dividend growth rate helps bridge the gap.
Image Source: Zacks Investment Research
Bottom Line
Buybacks have been common in recent years, with titans such as Alphabet (GOOGL - Free Report) , Apple (AAPL - Free Report) , and Microsoft (MSFT - Free Report) also regularly joining in on the fun.
Buybacks send a positive message to investors, indicating that the company is confident in its future prospects.
All three companies above – Chevron (CVX - Free Report) , Kinder Morgan (KMI - Free Report) , and Agilent Technologies (A - Free Report) – have recently announced repurchase programs, with investors cheering on the news.
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These 3 Companies Can't Get Enough of Their Own Stock
Stock buybacks, also regularly known as share repurchase programs, are a common strategy we see implemented by companies.
There are several reasons companies elect to buy back their stock; they’ve decided to utilize excess cash, they want to limit dilution caused by employee stock option programs, or simply because they believe their shares are undervalued.
Three companies – Chevron (CVX - Free Report) , Kinder Morgan (KMI - Free Report) , and Agilent Technologies (A - Free Report) – have all announced repurchase programs in 2023. Below is a chart illustrating the performance of all three over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at how each one stacks up.
Chevron
Chevron is one of the world's largest publicly traded oil and gas companies, with operations that span almost every corner of the globe. Yesterday, the company announced a sizable $75 billion share repurchase program.
The recent surge in energy prices has benefitted the company in a big way; CVX reported free cash flow of a steep $12.3 billion in its latest quarter, good enough for a 16% sequential uptick and an 84% Y/Y increase.
As we can see in the chart below, Chevron has been a cash-generating machine.
Image Source: Zacks Investment Research
In addition, the company’s dividend is in decent shape, currently yielding 3.2% annually paired with a sustainable payout ratio sitting at 33% of its earnings.
Image Source: Zacks Investment Research
Most importantly, the company is scheduled to release quarterly results tomorrow, January 27th, before the market open. Currently, the Zacks Consensus EPS Estimate of $4.16 suggests a 62% Y/Y increase in earnings.
And our consensus revenue estimate stands firm at $52.3 billion, suggesting an improvement of nearly 9% from the year-ago quarter.
Image Source: Zacks Investment Research
Kinder Morgan
Kinder Morgan is a leading midstream energy infrastructure provider in North America. Earlier in the year, KMI increased its previously authorized $2 billion stock buyback to $3 billion.
An increase in energy prices has helped Kinder Morgan increasingly reward its shareholders; KMI’s dividend payout grew nearly 3% over the last year, currently yielding a steep 6% annually.
Image Source: Zacks Investment Research
Impressively, last year marked the fifth consecutive year of increased payouts.
Image Source: Zacks Investment Research
Agilent Technologies
Agilent is an original equipment manufacturer (OEM) of a broad-based portfolio of test and measurement products serving multiple end markets. Currently, the company sports the highly-coveted Zacks Rank #1 (Strong Buy).
On January 9th, Agilent approved a fresh $2 billion share repurchase program.
Agilent has reported strong results as of late, exceeding the Zacks Consensus EPS Estimate by double-digit percentages in back-to-back releases. Just in its latest print, the company posted a 10% EPS beat and reported sales nearly 5% above expectations.
Image Source: Zacks Investment Research
The company does pay a dividend, currently yielding a modest 0.6%. Still, while the yield may be on the lower end of the spectrum, Agilent’s 8.6% five-year annualized dividend growth rate helps bridge the gap.
Image Source: Zacks Investment Research
Bottom Line
Buybacks have been common in recent years, with titans such as Alphabet (GOOGL - Free Report) , Apple (AAPL - Free Report) , and Microsoft (MSFT - Free Report) also regularly joining in on the fun.
Buybacks send a positive message to investors, indicating that the company is confident in its future prospects.
All three companies above – Chevron (CVX - Free Report) , Kinder Morgan (KMI - Free Report) , and Agilent Technologies (A - Free Report) – have recently announced repurchase programs, with investors cheering on the news.