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Buyback activity declined slightly last week with 12 companies announcing buybacks. Three out of these 10 companies happened to be banks. Medical diagnostics and devices company Hologic (HOLX) and oil refiner HF Sinclair Corporation (DINO) announced $1 billion buybacks each representing around 6.4% and 9.2% of their market caps at announcement respectively.
The buyback announcement that stood out last week in terms of the size of the announcement was the $3 billion additional buyback announced by Accenture (ACN) on September 22. The consulting giant also announced an additional $3 billion buyback last September. The company serves clients in more than 120 countries.
Accenture continues to return cash to shareholders through cash dividends and share repurchases. In fiscal 2022, the company returned $6.57 billion to shareholders, including $2.46 billion in cash dividends and $4.12 billion in share repurchases. Apart from buying back shares, Accenture has also been highly acquisitive with 19 acquisitions announced just this year. The company announced a 15% increase in its dividend payment to $1.12 per share. With a payout ratio of 37.5%, the company has additional room to increase its dividend or allocate more capital to buybacks in the future. Unfortunately the stock has lost more than a third of its value this year.
The company earned $2.60 per share in fiscal Q4 2022 ended August 2022 compared to $2.20 in the same quarter last year. Accenture has grown earnings per share at 14% per year over the past five years and missed earnings estimates only once in the past 5 years. Consulting revenues rose 14% year over year to $8.33 billion, and outsourcing revenues increased 16% year over year to $7.09 billion. Gross margin for fiscal Q4 2022 decreased slightly to 32.1% compared with 33.3% in the year-ago fiscal period. Operating income grew 15.8% from the year-ago fiscal quarter to $2.27 billion. The company cut its marketing, sales and administrative expenses during the quarter.
ACN delivered revenue of $62 billion during the trailing twelve months, representing record 26% year-over-year growth. They expect the revenue growth rate to moderate going forward and have guided towards 10% to 14% growth in fiscal Q1 2023. This might turn out to be optimistic given the current state of financial markets across the globe.
Accenture ended fourth-quarter fiscal 2022 with total cash and cash equivalent balance of $7.89 billion compared to $6.7 billion at the end of the prior fiscal quarter. Debt (excluding capital leases) of $55.1 billion is higher than I would have liked to see in a rising interest rate environment. The stock trades at a forward P/E of 22.51 and a forward EV/EBITDA of 13.49.
Welcome to edition 26 of Buyback Wednesdays, a weekly series that tracks the top stock buyback announcements during the prior week. The companies in the list below are the ones that announced the largest buybacks as a percentage of their market caps. They are not the largest buybacks in absolute dollar terms. A word of caution. Some of these companies could be low-volume small-cap stocks with a market cap below $2 billion.
Top 5 Stock Buyback Announcements
1. United Maritime Corporation (USEA): $1.73
On September 22, 2022, the Board of Directors of this shipping company approved an additional share repurchase program authorizing the company to repurchase up to $3 million of its class A common stock equal to nearly 18.1% of its market cap at announcement.
| Market Cap: $17.55M | Avg. Daily Volume (30 days): 1,738,384 | Revenue (TTM): N/A |
| Net Income Margin (TTM): N/A | ROE (TTM): N/A | Net Debt: N/A |
| P/E: 1.25 | Forward P/E: N/A | EV/EBIDTA (TTM): N/A |
2. Reliance Global Group, Inc. (RELI): $0.8
On September 23, 2022, the Board of Directors of this insurance company approved a new share repurchase program authorizing the company to repurchase up to 3 million of its class A common stock equal to nearly 16.6% of its market cap at announcement.
| Market Cap: $14.69M | Avg. Daily Volume (30 days): 467,368 | Revenue (TTM): $13.64M |
| Net Income Margin (TTM): 4.6% | ROE (TTM): 3.57% | Net Debt: $13.06M |
| P/E: N/A | Forward P/E: N/A | EV/EBIDTA (TTM): -7.67 |
3. The Beauty Health Company (SKIN): $11.58
On September 27, 2022, the Board of Directors of this health care products manufacturer approved an additional share repurchase program authorizing the company to repurchase up to $200 million of its class A common stock, representing nearly 11.5% of its market cap at announcement.
| Market Cap: $1.57B | Avg. Daily Volume (30 days): 1,520,927 | Revenue (TTM): $324.99M |
| Net Income Margin (TTM): -59.08% | ROE (TTM): -104.24% | Net Cash: $69.15M |
| P/E: N/A | Forward P/E: 68.97 | EV/EBIDTA (TTM): -192.09 |
4. HF Sinclair Corporation (DINO): $50.61
On September 21, 2022, the Board of Directors of this petroleum refiner and marketer approved a new share repurchase program re-authorizing the company to repurchase up to $1 billion of its class A common stock equal to nearly 9.2% of its market cap at the announcement.
| Market Cap: $10.35B | Avg. Daily Volume (30 days): 1,992,153 | Revenue (TTM): $28.93B |
| Net Income Margin (TTM): 5.61% | ROE (TTM): 21.66% | Net Debt: $2.07B |
| P/E: 5.91 | Forward P/E: 7.52 | EV/EBIDTA (TTM): 4.99 |
5. Ingredion Incorporated (INGR): $82.79
On September 26, 2022, the Board of Directors of this global ingredient solutions provider approved a new share repurchase program authorizing the company to repurchase up to 6 million shares of its class A common stock, equal to nearly 9.16% of its market cap at announcement.
| Market Cap: $5.18B | Avg. Daily Volume (30 days): 396,945 | Revenue (TTM): $7.45B |
| Net Income Margin (TTM): 6.13% | ROE (TTM): 15.13% | Net Debt: $2.07B |
| P/E: 11.81 | Forward P/E: 9.86 | EV/EBITDA: 7.99 |
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