The rent-to-own operator,
), declared an accelerated share repurchase program to buyback
its common shares worth about $125 million.
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For this, the company collaborated ties with Wells Fargo Bank,
National Association, a subsidiary of
Wells Fargo & Company
). Per the deal, Aaron's was scheduled to buyback about 3.5
million of Aaron's common stock on Dec 4, 2013, receiving a
consideration of about $125 million. This represented nearly 80%
of the number of shares planned to be repurchased under the
The company expects to conclude this accelerated share repurchase
program by May 2014. However, the program has the option to be
either completed earlier or even extended.
Aaron's total shares outstanding as of Oct 25, 2013 were nearly
76.3 million. The company plans to use its available cash to
buyback shares under the program. As of Sep 30, 2013, the company
had cash and investments of $309.2 million, while it generated
nearly $244.0 million of operating cash flow during the first
nine months of 2013.
With the intention of reviving its halted share repurchase
activity since the beginning of 2013, Aaron's authorized an
additional share repurchase program of 11 million on Oct 4. This
brought the company's total authorization as of that date to 15
Additionally, this Zacks Rank #3 (Hold) company has a consistent
track record of rewarding shareholders through regular dividend
payouts. The company is currently scheduled to pay a raised
quarterly cash dividend of 21 cents on Jan 3, 2014 to
shareholders with record as of Dec 2, 2013. Representing an
increase of 23.5% from the prior dividend rate of 17 cents, this
will mark the company's 8th consecutive annual dividend increase.
Aaron's has paid regular quarterly cash dividends since 2000. The
company's strategy of paying regular dividends and increasing the
same reflects its commitment to enhance long-term value for
shareholders. It also depicts the company's ability to boost
earnings and cash flows in the long run.
We believe that dividend payments and share repurchases not only
enhance shareholders' return, but raise the market value of the
stock as well. Through dividend payouts, companies bolster
investors' confidence, persuading them to either buy or hold the
script instead of selling it. Looking ahead, Aaron's remains
confident of its growth potential, thereby raising hopes for
further enhancement of shareholder value through dividend payouts
and share buybacks.
Other companies that recently announced new share repurchase
Mondelez International Inc.
Union Pacific Corp.