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Buyback Bonanza: 3 Buy-Rated Companies Scooping Up Shares

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Stock buybacks, or share repurchase programs, are commonly executed by companies to boost shareholder value. 

A stock buyback occurs when a company purchases outstanding shares of its stock. In its simplest form, buybacks represent companies essentially re-investing in themselves.

And as of late, several companies – Meta Platforms (META - Free Report) , American Eagle Outfitters (AEO - Free Report) , and HCA Healthcare (HCA - Free Report) – have unveiled new repurchase programs. Let’s take a closer look at each.

Meta Platforms

Meta’s quarterly results stole the show, with shares popping post-earnings. The technology titan posted a 10% beat relative to the Zacks Consensus EPS Estimate and reported sales 3% ahead of expectations, reflecting its fifth consecutive double-beat.

Up a remarkable 150% over the last year, better-than-expected results have driven performance.

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Image Source: Zacks Investment Research

Meta authorized an additional $50 billion in share buybacks and unveiled its first-ever dividend, helping to explain the strong reaction post-earnings. The stock is currently a Zacks Rank #2 (Buy), with earnings expectations creeping higher across the board.

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Image Source: Zacks Investment Research

The company’s growth profile remains solid, with expectations for its current year (FY24) suggesting 20% earnings growth on 13% higher sales. Improved profitability has been a major tailwind for the tech giant, with Q4 costs and expenses falling 8% year-over-year.

American Eagle Outfitters

American Eagle Outfitters is a specialty retailer of casual apparel, accessories, outerwear, and footwear for men and women. The company authorized a 30 million share buyback, replacing its previous authorization.

Like META, analysts have taken a bullish stance on the company’s outlook, landing the stock into a favorable Zacks Rank #1 (Strong Buy).

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Image Source: Zacks Investment Research

It’s hard to ignore the company’s growth expectations, with estimates for its current fiscal year suggesting 45% earnings improvement paired with a 5% sales increase. A favorable operating environment with lowered costs has provided meaningful tailwinds for the company.

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Image Source: Zacks Investment Research

And shares aren’t valuation stretched given the forecasted growth, with the current 13.6X forward earnings multiple comparing favorably to the respective Zacks industry average of 15.7X. The stock sports a Style Score of ‘A’ for Value.

HCA Healthcare

HCA Healthcare, a Zacks Rank #2 (Buy), is the largest non-governmental operator of acute care hospitals in the U.S. The company authorized an additional $3 billion share repurchase program in its latest quarterly print.

The company has enjoyed positive earnings estimate revisions across the board, particularly following the above-mentioned set of quarterly results in late January.

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Image Source: Zacks Investment Research

Income-focused investors could also find HCA shares attractive, yielding a respectable 0.8% annually. Dividend growth is also apparent, with the company boasting a shareholder-friendly 10.6% five-year annualized dividend growth rate.

Bottom Line

A common way that companies amplify shareholder value is through implementing share buybacks. They can provide a nice confidence boost for investors, indicating that the company is utilizing excess cash and can help put in a floor for shares.

And recently, all three companies above – Meta Platforms (META - Free Report) , American Eagle Outfitters (AEO - Free Report) , and HCA Healthcare (HCA - Free Report) – unveiled additional or fresh buyback programs.


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