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KKR Rewards Shareholders With Expanded Share Buyback Program

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KKR & Co. Inc. KKR cheered investors with enhanced capital deployment plans that entail an increase in the available amount underits repurchase program. The company has increased share repurchase amount to $500 million, per a recent 8K filing.

KKR anticipates that the program will remain effective until the maximum approved amount gets spent. Moreover, the buyback program has no expiration date. Other than repurchases of common stock, the buyback program will be utilized to retire equity awards granted per KKR’s equity incentive plans representing the right to receive common stock.

As of Oct 29, 2021, the remaining amount available under the repurchase program was $160 million.

In the first nine months of 2021, the company repurchased shares for $10.2 million and used another $1.7 for equity awards for common stock retired. As of Oct 29, 2021, the company had $160 million remaining under the share buyback plan. Hence, the new amount implies an increase of $340 million.

Share repurchases aside, KKR pays quarterly dividends of 15 cents per share. In February 2021, the company announced a 71% dividend hike to 15 cents.

As of the third-quarter end, the company had cash and cash equivalents of $12.5 million, an increase from $5.9 million as of Sep 30, 2020. Supported by its decent balance sheet, KKR is expected to continue with efficient capital deployment activities in the future. Through this, it will keep enhancing shareholder value. However, the low-interest-rate environment is a major concern.

Over the past six months, shares of KKR have rallied 27.9% against the decline of 5.8% for the industry it belongs to.

Six Months' Price Performance

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Currently, KKR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Companies That Took Similar Action

Over the past month, several companies have rewarded shareholders with new share-repurchase programs. A few of these are United Community Banks, Inc. UCBI, Columbia Financial, Inc. CLBK and Cadence Bank CADE.

United Community Banks’ board of directors approved a repurchase of up to $50 million of UCBI’s outstanding shares. The plan will expire on Dec 31, 2022. The new repurchase plan replaces the previous one, which authorized United Community Banks to buy back up to $50 million shares until Dec 31, 2021.

Theplan was announced by UCBIin November 2020. As of Sep 30, 2021, the authorization to repurchase shares worth $34.9 million was intact.

Columbia Financial announced that its board of directors approved the repurchase of up to 5 million shares or 4.6% of its outstanding shares. The plan has no expiry date.

CLBK’s new share repurchase plan was adopted after receiving the no-objection from the Federal Reserve Bank of Philadelphia. The new repurchase plan will be effective following the completion of Columbia Financial’s previous buyback program, which was announced in February 2021.

Cadence Bank announced that its board of directors authorized a share repurchase program for 2022. The board of directors approved the buyback of up to 10 million shares of CADE.

The new share repurchase program is subject to the approval of the Federal Deposit Insurance Corporation and will be effective Jan 3, 2022. CADE’s buyback plan will expire on Dec 30, 2022.


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