Allegion's Board Okays 19% Dividend Hike, $800M Share Buyback
Zacks Investment Research | Feb 06, 2020 11:03PM ET
Allegion plc (NYSE:ALLE) announced twin rewards for its shareholders in the form of share buyback authorization and a hike in its quarterly dividend rate. These rewards were approved by its board of directors.
We believe that such disbursements vouch for Allegion’s shareholder-friendly policies and a strong cash position.
Details of Share Buyback & Quarterly Dividend
Under the new buyback program, Allegion is allowed to repurchase up to $800 million worth shares. Notably, the company’s new buyback plan replaces the one that was authorized by its board in 2017.
Additionally, the company announced 19% or 5 cents per share rise in the quarterly dividend rate, which now increased from 27 cents to 32 cents. On an annualized basis, the dividend raised to $1.28 per share from $1.08. This increment marks the company’s 6th consecutive year of dividend raise.
Allegion will pay out the revised dividend on Mar 31, 2020 to its shareholders of record as of Mar 17.
Capital-Allocation Strategies
Allegion uses free resources to strengthen its growth prospects and reward its shareholders through share buybacks and dividend payments.
Over the last five years (2014-2018), the company’s annual dividend payments climbed from 32 cents per share to 84 cents. Also, it bought back shares worth $292.7 million during the same time frame.
In the first nine months of 2019, the company distributed dividends totalling $75.5 million and repurchased shares worth $179.7 million.
Zacks Rank, Earnings Projections and Price Performance
The company currently has a market capitalization of $12.4 billion and a Zacks Rank #3 (Hold). It is poised to gain from a strengthening electronic business, pricing actions, improved operational efficacy and shareholder-friendly policies. However, rising costs, huge debt load and forex woes are concerning.
For 2019, the company anticipates earnings per share to be $4.85-$4.90, narrowed from $4.80-$4.90 stated previously. Revenues are projected to grow 4.5-5.5% year over year. Notably, the company will release fourth-quarter 2019 results on Feb 18, 2020.
Earnings estimates for Allegion have been lowered in the past 60 days. Currently, the Zacks Consensus Estimate for the bottom line is pegged at $4.87 for 2019 and $5.34 for 2020, indicating a downward revision of 0.4% and 0.2% each from the respective 60-day-ago figures.
Allegion PLC Price and Consensus
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.