Credit: Shutterstock photoIn a move to further enhance shareholders' wealth, JetBlue Airways Corporation 's JBLU board of directors approved a new share repurchase program. This latest move reflects the company's sound financial position and favorable prospects.
The new authorization permits JetBlue to buy back its common stock worth up to $750 million. The duration of the program, which commences from Jan 1, 2018, is of two years. As of Sep 30, 2017, the company had approximately 327.8 million shares outstanding. This low-cost carrier ended the third quarter of 2017 with cash and cash equivalents of nearly $394 million.
Notably, management's new authorization comes after JetBlue completed its previous $500 million share repurchase program in September, 2017. We note that the program had commenced on Jan 1, 2016.
The latest buyback program, announced by this Zacks Rank #3 (Hold), is in sync with its impressive record of rewarding shareholders. On the third-quarter conference call, JetBlue stated that the company has returned in excess of 7% of its average market capitalization to its shareholders in a year. The figure is the second best among airline stocks, according to JetBlue. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
JetBlue Airways Corporation Price
JetBlue Airways Corporation Price | JetBlue Airways Corporation Quote
Apart from JetBlue, United Continental Holdings UAL also recently announced a new $3 billion share repurchase program. The company's previous $2 billion share repurchase program announced in July 2016 is expected to be completed by this year-end. Additionally, the likes of Southwest Airlines LUV and Delta Air Lines DAL have hiked their respective dividend payouts this year.
In fact, the financial prosperity of companies in the airline space has allowed them to undertake shareholder-friendly measures like dividends and buybacks. We believe such initiatives not only enhance shareholders' return but also raise the market value of a stock.
Through share repurchases and dividend payouts companies bolster investors' confidence, persuading them to either buy or hold the scrip.
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Southwest Airlines Company (LUV): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
