Xylem's New Share Buyback Program - Analyst Blog


Xylem Inc. ( XYL ), one of the leading providers of innovative solutions for global water challenges, recently announced the approval of a new share buyback program that will enable the company to reward its shareholders well.

The approval gives Xylem the authorization to repurchase up to $250 million worth shares from the open market in a three year time-period. Along with this, the company also declared to pay a quarterly dividend of $0.1164 per share on Sep 18, 2013 to shareholders of record on Sep 4, 2013.

This announcement will likely raise investors' confidence in the stock. Xylem follows a consistent policy of rewarding its shareholders with dividend payments garnished with occasional increases and share buyback programs. These also points toward the company's healthy balance sheet and strong cash position.

A look into Xylem's second quarter 2013 financial results (announced on Jul 30, 2013) clearly shows the compliance with this capital deployment policy. During the quarter, shares worth $18 million were repurchased while approximately $43 million were paid as dividend.

Talking of Xylem's cash position, cash and cash equivalents exiting the quarter were $360 million while roughly $42 million were generated from operating activities.     

The Zacks Consensus Estimate for Xylem currently stands at 38 cents for the third quarter 2013, reflecting a decline of 13.6% year over year. Earnings Estimate for 2013 and 2014 are at $1.43 and $1.75, down 19.2% and up 22.6%, respectively.

Xylem Inc. is based in White Plains, New York and operates in more than 150 countries worldwide. The company currently has a $4.5 billion market capitalization and carries a Zacks Rank #5 (Strong Sell).

Other stocks to watch out for in the industry are Gorman-Rupp Co. ( GRC ) and Graham Corp. ( GHM ), each with a Zacks Rank #1 (Strong Buy) while The Middleby Corp. ( MIDD ) carries a Zacks Rank #2 (Buy).

GRAHAM CORP (GHM): Free Stock Analysis Report

GORMAN RUPP CO (GRC): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

XYLEM INC (XYL): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: GHM , GRC , MIDD , XYL



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