In a bid to enhance shareholders’ value, Dana Holding Corporation (DAN) recently increased the share repurchase program to $1 billion. With this, the company effectively enhanced the share repurchase program by $900 million as $100 million is already utilized for this purpose.
The company will buy back shares either in open market or through private negotiated transactions in the coming two years subject to prevailing market conditions and other considerations.
Dana expects its strong liquidity will support this initiative. Dana had cash and cash equivalents of $981.0 million as of Mar 31, 2013, compared with $773.0 million as of Mar 31, 2012. Total debt was $923.0 million as of Mar 31, 2013, lower than $935.0 million as of Mar 31, 2012.
In addition, Dana refinanced its U.S. revolving credit facility with a new five-year $500 million revolving credit facility. This initiative will support the company in reducing on-going costs and by providing financial flexibility.
In the first quarter of 2013, Dana repurchased 1.4 million shares for $24 million under its share repurchase program. Since the announcement of the share repurchase program worth $250 million in Oct 2012, Dana has repurchased about 3.6 million shares for $58 million of common stock till April 23.
Maumee, Ohio-based Dana is one of the world’s leading suppliers of driveline, sealing, and thermal technologies, which improves the efficiency and performance of passenger, commercial and highway vehicles. Currently, Dana retains a Zacks Rank #3 (Hold) on its stock.
Few stocks that are performing well in the industry where Dana operates include Visteon Corp. (VC), Magna International Inc. (MGA) and Johnson Controls Inc. (JCI). Visteon and Magna carry a Zacks Rank #1 (Strong Buy) while Johnson Controls has a Zacks Rank #2 (Buy).
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