In order to enhance shareholder value, the board of directors
Briggs & Stratton Corporation
), declared an increase of $50 million to the company's share
repurchase authorization. Moreover, Briggs & Stratton
extended the expiry of the buyback to Jun 2016.
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The stock price rose around 3% and closed at $22.73 at the end of
trading on Jan 22 after this announcement. The share repurchase
will help the company offset any potentially dilutive impacts of
share-based compensation under its incentive compensation plan.
Since Aug 2011, Briggs & Stratton has bought back about $93
million worth of its common stock. With the latest announcement,
the company currently has $57 million available for repurchase as
of Jan 22, 2014.
Notably, Briggs & Stratton also facilitates returns to
shareholders through dividends. Management has recently approved
a regular quarterly cash dividend of 12 cents per share, which
translates to an annualized dividend of 48 cents per share. The
dividend yield based on the new payout and the last closing
market price is 2.1%.
As of the first-quarter fiscal 2014-end, Briggs & Stratton's
cash and cash equivalents were $115 million up from $101.6
million as of Sep 30, 2012. Briggs & Stratton could
repurchase shares using the available cash, in the open market or
in private transactions, depending upon market conditions. The
company's strong financial position and healthy cash flow will
likely enable it to pursue further buybacks.
For fiscal 2014, Briggs & Stratton expects net income to
range between $50 million and $62 million and earnings per share
within $1.04 and $1.28. Net sales for fiscal 2014 is expected to
be in the band of $1.88 billion and $2.03 billion.
Briggs & Stratton remains committed to its restructuring and
cost reduction plans. However, the ongoing global economic
uncertainty and adverse weather conditions may affect the
Milwaukee, Wis.-based Briggs & Stratton is the world's
largest producer of gasoline engines for outdoor power equipment.
Its wholly owned subsidiary, Briggs & Stratton Power Products
Group LLC, is North America's top manufacturer of portable
generators and pressure washers. This subsidiary is also a leader
in the designing, manufacturing and marketing of standby
generators, and lawn, garden and turf care products through its
Briggs & Stratton currently has a Zacks Rank #3 (Hold).
However, other better-ranked stocks worth a look in the
industrial product sector include
Altra Industrial Motion Corp.
ARC Document Solutions, Inc.
). All of these have a Zacks Rank #2 (Buy).