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DXP Enterprises' (DXPE) Board Okays $85M Share Buyback Program

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·3 min read
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DXP Enterprises, Inc. DXPE yesterday announced that its board of directors approved a share buyback program for its shareholders. The funding of the buyback is to be done with the company’s available working capital.

We believe that the move reflects DXP Enterprises’ shareholder-friendly policies and strong cash position.

Inside the Headlines

As noted, the company has been authorized to repurchase 1.5 million of its shares (worth approximately $85 million). The authorization is valid for the company for the next 24 months and can be used for negotiated or open-market transactions.

Further, the company can stop with the share buybacks when it seems appropriate or unwarranted.

It is worth noting here that DXP Enterprises’ shares outstanding were 20 million at the end of first-quarter 2021. Also, its cash and cash equivalents were $127.4 million exiting the quarter, reflecting a sequential increase of 8.5%. We believe that further improvement in cash position and financial performances in the quarters ahead will enable the company to reward its shareholders handsomely.

Capital Deployment

DXP Enterprises effectively uses capital for boosting organic growth, making acquisitions and rewarding shareholders (the other means being dividend payouts).

In the first quarter of 2021, the company paid out dividends totaling $23,000 to its shareholders. Also, the company closed the acquisition of Carter & Verplanck, Inc. on May 3. The buyout is expected to strengthen DXP Enterprises’ water and wastewater portfolio.

DXP Enterprises and Other Stocks With Active Buyback Program

DXP Enterprises specializes in distributing products and services for use in industrial markets in Dubai, Canada and the United States. Its solid product offerings, exposure in diversified end markets, buyouts and focus on innovation are likely to be beneficial in the quarters ahead. However, the persistence of weakness in Innovative Pumping Solutions and Supply Chain Services are anticipated to be concerning.

In the year-to-date period, shares of the company have gained 33.1% compared with the industry’s growth of 9.1%.




Some other stocks in the Zacks Industrial Products sector, which are actively engaged in repurchasing shares, are Illinois Tool Works Inc. ITW, Worthington Industries, Inc. WOR and Stanley Black & Decker, Inc. SWK.

In the year-to-date period, shares of Illinois Tool have gained 13.7%, Worthington has risen 31.2% and Stanley Black has grown 17.5%.

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Worthington Industries, Inc. (WOR) : Free Stock Analysis Report

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Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report

DXP Enterprises, Inc. (DXPE) : Free Stock Analysis Report

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