Consider stocks that make money for shareholders in this volatile market
Jim Cramer on CNBC’s Halftime Report.
Scott Mlyn | CNBC
In a struggling market, one group of stocks that investors can focus on more are those that generate strong free cash flow and shareholder-friendly return on capital programs. Like we said last Friday, companies with strong balance sheets, healthy dividend payments, and consistent stock buyback programs are typically the ones that can resist and find support in volatile markets. We believe that this has largely played out this week, the case being Apple, which repurchased 20 billion dollars of shares in its last quarter, regarded as a “safe haven” as the reason for the notable outperformance of the stock.
Many of the companies in our portfolio regularly buy back stocks and increase their dividend payments year after year. These are characteristics that we look for in many of our investment decisions. Below, we’ve highlighted three names that have all announced new and improved ROI programs over the past week.
Even in today’s ugly gang Nucor shares are on the rise after the company announced Thursday night a 23% increase in its quarterly cash dividend. The announcement marked the 49th consecutive year that Nucor has increased its regular, or base, dividend. Nucor’s updated annual dividend payout is now $ 2 per share, bringing the yield to around 1.8%. In addition to the dividend announcement, Nucor said its board of directors approved a buyback program of up to $ 4 billion. The new authorization replaces the previously authorized $ 3 billion program, under which $ 2.33 billion of shares were repurchased from May to December 1.
Nucor isn’t the only Charitable Trust company to announce new buyout programs this week. MasterCard increased its dividend by 11% and on Tuesday announced a new share buyback program of up to $ 8 billion. The market didn’t seem to care about this news as concerns about the omicron Covid variant disrupting the cross-border took hold, but we don’t think the company is considering repurchasing all of those shares if it doesn’t see the recent weakness as an opportunity. long-term purchase.
Wednesday, the new initiation to the Charitable Trust Chevron raised its range of share buyback forecasts to $ 3 billion to $ 5 billion per year, from earlier forecasts to $ 2 billion to $ 3 billion per year. We cannot say that we were completely surprised by this news. In our initiation station, we mentioned that it was only a matter of time before management increased their buyout activity. Keep in mind that Chevron’s emphasis on capital and cost discipline means that the majority of the excess cash they generate will flow back to shareholders in the form of dividends and redemptions. And how can we not appreciate this huge dividend of 4.67% as something that investors can fall back on if the market remains volatile?
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