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HP to Boost Shareholder Return With New Repurchase Program

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HP Inc. (HPQ - Free Report) , yesterday, in a filing with the U.S. Securities and Exchange Commission (SEC), announced that its board of directors has approved a new share repurchase authorization of $4 billion. However, management stated that the timing and number of shares to be bought will depend upon prevailing market conditions and other factors.

The latest approval is in addition to the company’s existing authorization, wherein approximately $1.2 billion worth balance remaining as of Apr 30, 2018.

This apart, management also announced a quarterly cash dividend of 13.93 cents per share to be paid on Oct 3 to shareholders of record date as of Sep 12, 2018.

HP has a steady track record of returning value to shareholders through share repurchases and dividend payouts. The company, since its split from Hewlett Packard Enterprise Company (HPE - Free Report) , has returned approximately $2 billion to shareholders through share buybacks and dividend payments.

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 second-quarter fiscal 2018 with cash, cash equivalents and marketable securities of nearly $4.25 billion and generated more than $2 billion of cash flows from operating activities in the first half of the fiscal.

Some other companies that have a consistent track record of returning value through share repurchases and dividend payments include Microsoft (MSFT - Free Report) and Apple Inc. (AAPL - 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 boost investors’ confidence, persuading them to either buy or hold the scrip. Looking ahead, HP remains confident on its growth potential, thereby raising hope for further improvement in shareholder value.

HP Inc. Price

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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