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Rockwell Collins Inc. (COL - Analyst Report) has been sanctioned the repurchase of its common stock worth $500 million from its Board of Directors. The announcement proves the company’s ability to generate a steady stream of cash flow in the long term.

The current approval takes the share authorization amount to $604 million. Going forward, the company intends to maintain an active share repurchase program. It indicated that this additional authorization is expected to meet all share repurchase plans for the balance of fiscal year 2013 and into 2014.

In Jan 2013, the company released its first quarter 2013 results ending Dec 31, 2012 with earnings of 94 cents per share outpacing the Zacks Consensus Estimate of 90 cents the and year-ago quarterly earning of 86 cents per share.

The earnings per share figure was up 9% in comparison to net income driven by the active share repurchase program. In the first quarter of 2013, the company repurchased 6 million shares of common stock at a total cost of $333 million.

Rockwell Collins ended the quarter with cash and cash equivalents of $337 million. At the end of fiscal 2012, ending Sep 30, 2012, the company had $335 million in cash. Cash from operating activities for the first quarter of 2013 totaled $63 million, an increase of $127 million from a cash burn of $64 million in the first quarter of 2012.

As of Dec 31, 2012, short-term commercial paper borrowings outstanding were $345 million. These commercial paper borrowings were incurred in order to fund a portion of the company's share repurchase program.

The company has also been paying dividends consistently. In Jan 2013, the company announced to pay a quarterly dividend of 30 cents per share on Mar 4, 2013 to shareholders of record at the close of business on Feb 11, 2013. Indeed, the company had increased its dividend by 25% in Apr 2012.

Another prominent aerospace stock, L-3 Communications Holdings Inc. (LLL - Analyst Report) has also increased its dividend as well as announced a new share repurchase program a few days back. It increased its quarterly dividend by 10% and also authorized the repurchase of up to an additional $1.5 billion of the company’s common stock through Jun 30, 2015.

Based in Cedar Rapids, Iowa, Rockwell Collins designs, manufactures, and supports software and hardware solutions for aircraft communication, navigation, signals intelligence, and weapons systems as well as surveillance systems for government, military, and commercial applications.

Rockwell Collins is the foremost global supplier of communications and avionics equipment for both commercial and military customers. Moreover, the company is witnessing a rejuvenated business jet market with rising original equipment and improving aftermarket fortunes.

Furthermore, a strong balance sheet, incremental dividend, and ongoing share repurchase program add visibility to the story. The company’s dividend increase as well as its share repurchase strategy demonstrates Rockwell’s commitment to return value to its shareholders. The company presently retains a short-term Zacks Rank #2 (Buy).

Other stocks worth considering are Hexcel Corp. (HXL - Snapshot Report) and Alliant Techsystems Inc. (ATK - Analyst Report), both with a Zacks Rank #2 (Buy).

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