Medical technologies and devices major,
CR Bard Inc.
) raised its quarterly dividend by 5% to 20 cents per share. The
increased dividend will be paid on August 3, 2012 to shareholders
of record as of July 23, 2012.
The board of directors of the company also announced a share
repurchase program to buy back up to $500 million of shares through
open market purchases or private negotiations.
C.R. Bard's commitment towards hiking shareholders' return as
well as announcing a share repurchase program reflects its stable
cash position and healthy cash flow. It ended the first quarter of
2012 with strong cash and short-term investments of $804.4 million,
recording an 8.2% sequential rise.
For fiscal 2012, the company expects cash flow from operations
to be around $500 million. Capital expenditure is projected in the
range of $65 million to $75 million.
C.R. Bard has repurchased roughly 1.2 million shares in the
first quarter of 2012 and is still left with roughly 88 million
shares to repurchase under the June 2010 share repurchase
We believe that the share buyback program and the dividend hike
together are the best strategic moves by the company to attract
investors. This strategy also positions Bard in a positive light
amidst tough macroeconomic conditions.
C.R. Bard's well-diversified end markets and vast product
portfolio insulate it from fluctuations in any single therapeutic
category. We expect new product launches to drive organic revenue
growth and help C.R. Bard to meet its sales objective.
However, increasing competition and pricing/volume pressure
remain areas of concern. C.R. Bard faces strong competition from
Johnson & Johnson
). We currently have a Neutral rating on C.R. Bard. The stock
currently retains a Zacks #3 Rank, which translates into a
short-term "Hold" recommendation.
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