24/7 Wall St.

It was just last week that we had identified literally 25 big share buyback announcements from companies in the preceding two weeks.  These companies were actually buying back the stock as well rather than the historic buybacks that are not required to spend a penny.  It turns out that the trend for August remains.  Many new buyback announcements have been announced and it seems like companies are unlocking cash to repurchase their shares in droves.

Some of the larger and more impacting buyback announcements have been made by the following companies: Principal Financial Group Inc. (NYSE: PFG); Progressive Waste Solutions Ltd. (NYSE: BIN); Cliffs Natural Resources Inc. (NYSE: CLF); Life Time Fitness Inc. (NYSE: LTM); AECOM Technology Corp. (NYSE: ACM); Forest Laboratories Inc. (NYSE: FRX); Interpublic Group of Companies, Inc. (NYSE: IPG);  Myriad Genetics Inc. (NASDAQ: MYGN); Republic Services, Inc. (NYSE: RSG); Lorillard, Inc. (NYSE: LO); Newell Rubbermaid Inc. (NYSE: NWL); and TiVo Inc. (NASDAQ: TIVO).

By now you already know that the attitude of 24/7 Wall St. is that dividends offer better long-term value than buybacks.  We have shown what the dividend yield is for each here, or we have shown that there is no dividend.

Principal Financial Group Inc. (NYSE: PFG) announced that its board of directors has authorized a share buyback plan for up to $200 million in common stock.  This represents about 8.5 million shares at current prices when average daily volume is 2.7 million shares.  Its market cap is about $7.4 billion.  The dividend yield is roughly 2.3% as of today.

Progressive Waste Solutions Ltd. (NYSE: BIN), also referred to as BFI Canada, announced a buyback of up to 4 million shares of common stock.  That is about $80 million at today’s price.  The market cap is $2.5 billion and the average daily volume is about 428,000 shares.  The dividend yield is listed as being about 2.5%.

Cliffs Natural Resources Inc. (NYSE: CLF) has announced the authorization to buy back up to 4 million shares, close to $300 million in total per today’s dollars.  The market cap is nearly $11 billion and the average volume is 3.7 million shares.  The company’s dividend yield is only 1.5%.

Life Time Fitness Inc. (NYSE: LTM) has authorized a new buyback plan to repurchase up to $60 million in common stock over the next two years. This represents about 1.6 million shares at the current share price, the market cap is $1.45 billion, and the average volume is just over 500,000 shares.  The company pays no dividend.

AECOM Technology Corp. (NYSE: ACM) has been in trouble as global austerity measures threaten its large infrastructure projects.  The company has authorized a $200 million share buyback plan, or about 10 million shares based on current prices.  The market cap is about $2.4 billion and AECOM trades about 850,000 shares per day.  Surprisingly, and perhaps illogically, AECOM pays no dividend.

Forest Laboratories Inc. (NYSE: FRX) agreed to repurchase another $350 million of common stock from Morgan Stanley (NYSE: MS).  This came to just over 3% of the company’s value at the time and the current market cap is $9.55 billion.  Forest is one of the few brand and generic drug-makers that pays no dividend.

Interpublic Group of Companies, Inc. (NYSE: IPG) expanded its buyback plan with up to $450 million more for share buybacks.  What is interesting is that this represents more than 50 million shares at current prices and the market cap is about $4.15 billion.  The company has a dividend yield of 2.7%.

Myriad Genetics Inc. (NASDAQ: MYGN) on Monday said it authorized up to $200 million to be used for share buybacks.  This was about 12% of the diagnostic test company’s market cap.  The value today is almost $1.7 billion and the stock trades only about 1.1 million shares a day.  This is not quite a biotech dividend, but it is one move closer.  The company has no formal dividend.

Republic Services, Inc. (NYSE: RSG) was one of the larger buybacks in recent days as it announced it would repurchase up to $750 million in stock to add to a prior plan.  This represents almost 27 million shares today.  Republic has a market value of about $10.6 billion and the average daily volume is almost 2.9 million shares.  Republic also offers a dividend yield currently of about 3.1%.

Lorillard, Inc. (NYSE: LO) completed a prior plan and announced on Monday that it was adding another $750 million to its buyback efforts that had been for $1.4 billion.  The current market cap is almost $15 billion and this trades almost 2 million shares a day.  The dividend yield is almost 5%.

Newell Rubbermaid Inc. (NYSE: NWL) announced last Friday that it had approved a $300 million stock repurchase program over the next 3-years.  This represents close to 23 million shares today and the average volume is almost 5 million shares per day.  The market cap is about $3.8 billion and the dividend yield is close to 2.3%.

TiVo Inc. (NASDAQ: TIVO) is another company which some will wonder if the buyback is ever exercised or not but last Friday it announced that its board authorized the repurchase of up to $100 million of common shares over the next two years, funded by existing cash on hand.  TiVo has a market cap of just over $1 billion and trades about 3 million shares per day.  TiVo pays no dividend.

As a reminder, many companies do not have to use a single penny or dollar of a buyback plan just because they declare a buyback.  The difference is that we have filtered out the very questionable plans and focused on the companies which are either large enough to matter or which can actually be exercised.

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JON C. OGG