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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,Kinder Morgan and Agilent Technologies – 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.
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.
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.
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.
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.
Impressively, last year marked the fifth consecutive year of increased payouts.
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.
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.
Bottom Line
Buybacks have been common in recent years, with titans such as Apple and Microsoft 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, Kinder Morgan and Agilent Technologies – have recently announced repurchase programs, with investors cheering on the news.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Chevron, Kinder Morgan, Agilent Technologies, Apple and Microsoft
For Immediate Release
Chicago, IL – January 27, 2023 – Today, Zacks Investment Ideas feature highlights Chevron (CVX - Free Report) , Kinder Morgan (KMI - Free Report) , Agilent Technologies (A - Free Report) , Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) .
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,Kinder Morgan and Agilent Technologies – 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.
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.
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.
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.
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.
Impressively, last year marked the fifth consecutive year of increased payouts.
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.
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.
Bottom Line
Buybacks have been common in recent years, with titans such as Apple and Microsoft 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, Kinder Morgan and Agilent Technologies – have recently announced repurchase programs, with investors cheering on the news.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.