Fortune Brands Home & Security, Inc.
), the provider of home and security products, yesterday announced
the authorization of a new share repurchase program by the
company's board of directors, which reflects the company's sound
financial position and favorable prospects.
This new share repurchase authorization, which is valid till Jun
2, 2016, permits FBHS to buyback a maximum of $250 million of its
outstanding shares. This is in addition to the current $50 million
share repurchase authorization remaining under the $150 million
share buyback program announced on Feb 25, 2014.
In the first quarter of 2014, FBHS purchased $68.7 million worth
of its common stock. Year-to-date, the company bought back over
$190 million worth of its common shares.
The company has a consistent track record of returning cash to
shareholders through share repurchase and dividend payouts. Prior
to the share buyback announcement in February 2014, the company's
board hiked its quarterly dividend by 20% to 12 cents per share on
Dec 10, 2014, thereby bringing the annual dividend to 48 cents.
This Zacks Rank #3 (Hold) company has consistently paid dividend
for the last five quarters. It got publicly listed in Sep 2011
after its parent company Fortune Brands Inc. spun off its
businesses into three standalone units, giving investors pure plays
in golf, home products and alcoholic drinks. The radical separation
has been the outcome of four years of strategic evaluation
conducted by Fortune Brands' board and management.
The company's strategy of paying regular dividend and increasing
the same at feasible intervals reflects its commitment to enhance
long-term value for shareholders. Through this, FBHS also
demonstrates its ability to boost earnings and cash flows in the
Dividend hikes and share repurchase programs are frequent among
companies with a stable cash position and healthy cash flow. Apart
Avis Budget Group Inc.
Urban Outfitters Inc.
) authorized new share buyback programs in the recent past.
We believe that share repurchases and dividend payments not only
enhance shareholder return but raise the stock's market value as
well. Looking ahead, FBHS remains confident of its growth
potential, thereby raising hopes for a further increase in
shareholder value through dividend payouts and share buybacks.
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FORTUNE BRD H&S (FBHS): Free Stock Analysis
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