These 7 undervalued stocks returning capital to shareholders
These seven undervalued stocks are worth buying since they
are dedicated to returning capital to shareholders through large buyback
programs. This is through both dividend payments that are generous and share
repurchases. The repurchases reduce shares outstanding, which has three
immediate effects.
To begin with, it increases the remaining shareholders’
stake in the company. This allows them to gain a bigger portion of any
shareholder capital returns, including spin-offs, dividends and rights
offerings.
As well, a stock repurchase ultimately allows the company to
make a higher dividend per share payment in the future for the same cost as
before.
And, the smaller number of shares outstanding automatically
increases earnings per share. Another major effect of share repurchases is that
the stock price tends to rise as the company soaks up demand from selling
shareholders.
Let’s dive in and look at these undervalued stocks.
Comments
Post a Comment