Monster Beverage Okays $500M Share Buyback Program
The board of directors of Monster Beverage Corporation MNST has authorized a share repurchase program worth $500 million. Shares may be repurchased in the open market or through privately negotiated transactions, subject to regulatory approvals.
This California-based energy drink company completed its previous share repurchase program valued at $200 million.
During the second-quarter 2015 earnings conference on Aug 6, the company had mentioned that its board of directors was considering a return of capital through programs such as share repurchases. The consideration came as the company received a major boost following the closure of its deal with The Coca-Cola Company KO on Jun 12.
The long-term deal with Coca-Cola Company gave the company full access to Coca-Cola’s world-class global distribution network. The deal is expected to enhance the cash position while significantly expanding Monster’s presence in the international energy drinks market, where it currently has a limited presence. Moreover, the brands acquired from Coca-Cola, which are produced as concentrates or beverage bases, are high-margin products and will drive Monster Beverage’s top line and gross margin over the near term.
The company had cash and cash equivalent of $1.70 billion at the end of the second quarter 2015. Apparently, management has been able to fulfill its commitment to return values to stockholders.
Monster Beverage carry a Zacks Rank #3 (Hold).
Stocks to Consider
Investors interested in the beverage industry may consider Dr Pepper Snapple Group, Inc. DPS and Cott Corporation COT. Both companies carry a Zacks Rank #2 (Buy).
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MONSTER BEVERAG (MNST): Free Stock Analysis Report
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