Cashed up and nowhere to go

16 February 2011 By Nicholas Paisner

Share repurchases are back in vogue, with Intel, GSK, Rio and BHP unveiling plans to buy back stock. That may suggest companies lack uses for their money. But the size of recent schemes is still modest. And it’s easy to redeploy cash if new opportunities come up.

This content is for Subscribers only

Context News

A number of global companies have announced plans to buy back shares with their latest results.

BHP said on Feb. 16 it would more than double its share buyback to $10 billion this year, bowing to investor demands to put its growing cash pile to work.

Rio Tinto said on Feb. 9 it would repurchase $5 billion of its own shares by the end of 2012. Based on current stock price, the buyback equates to around 4 percent of the company's outstanding shares. Rio also increased its final dividend, raising total 2010 dividends 20 percent above those of 2009.

GlaxoSmithKline said on Feb. 3 it would begin buying back shares. It expects to repurchase 1 billion to 2 billion pounds of stock in 2011, equivalent to around 2.5 percent of its current share count. The company also increased its fourth quarter dividend by 7 percent.

Intel said on Jan. 24 it would increase limit for share repurchases by an additional $10 billion, raising the overall outstanding buyback authorisation to $14.2 billion. Intel said in November 2010 that it would increase its quarterly dividend payments by 15 percent.

Email a friend

Please complete the form below.

Required fields *