The world’s leading electronics components distributor, Avnet Inc. (AVT - Free Report) , last week announced that its board of directors has increased the current share repurchase authorization by $200 million, thereby bringing the total authorization limit to approximately $500 million. However, management stated that the timing and number of shares to be bought will depend upon prevailing market conditions as well as other factors.
Apart from this, management also announced a quarterly cash dividend of 18 cents per share to be paid on Dec 19 for the shareholders of record date as of Dec 6.
Avnet has a steady track record of returning value to shareholders through share repurchases and dividend payouts. The company notified that in the past six years, it has returned more than $1.7 billion to its shareholders through share buybacks and dividend payments.
Also, it should be noted that the company has approved nearly $2 billion of cumulative share repurchase program since 2011, of which it has completed the purchase of approximately $1.43 billion worth of common stocks.
The company’s strong balance sheet and cash flow provide it with the financial flexibility to undertake shareholder-friendly initiatives and scope for product innovation and expansion in newer markets. The company ended first-quarter fiscal 2018 with cash, cash equivalents and marketable securities of nearly $737.6 million.
Some other companies that have a consistent track record of returning value through share repurchases and dividend payments include Apple Inc. (AAPL - Free Report) , Accenture plc (ACN - Free Report) and Automatic Data Processing Inc. (ADP - Free Report) .
We believe such initiatives not only enhance shareholders’ return but also raise the market value of a stock. Through share repurchases and dividend payouts, companies bolster investors’ confidence, persuading them to either buy or hold the scrip. Looking ahead, Avnet remains confident on its growth potential, thereby raising hope for further rise in shareholder value.
The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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