EMCOR (EME) Increases Share Buyback Program By $200 Million
Zacks Investment Research | Mar 03, 2020 09:13PM ET
EMCOR Group, Inc. (NYSE:EME) continues to reward its shareholders through share buybacks. The company’s board of directors authorized an additional $200 million for the purchase of shares of its outstanding stock under the current share repurchase program.
The share repurchase authorization will be effective immediately and is an addition to the company’s previous authorization of $200 million. Notably, the previous authorization had $158.5 million remaining authorized and available as of Dec 31, 2019.
Since the inception of the program on Sep 26, 2011 through Dec 31, 2019, EMCOR repurchased 15.9 million shares of its outstanding common stock for $791.5 million under its share repurchase program.
The company announced that it has entered into a $1.6-billion credit agreement with a syndicate of banks. The credit agreement, which matures in March 2025, includes a $1.3-billion revolving credit facility and $300 million term loan.
It intends to use the proceeds of the term loan to refinance existing indebtedness, pay transaction fees and for other general corporate purposes. The revolving credit facility is expected to be utilized for working capital and other general corporate needs.
EMCOR executes a balanced capital allocation strategy via utilizing its healthy balance sheet to pursue strategic acquisition opportunities, and returning capital to its shareholders through share repurchases and dividends. In 2018 and 2019, it returned approximately $253 million in cash to its shareholders through dividends and share repurchases. In 2020, the company’s capital allocation strategies remain the same.
Zacks Rank, Earnings Projections and Price Performance
In a year’s time, the stock has rallied 9.2% against the industry’s decline of 12.4%. EMCOR — which shares space with MasTec, Inc. (NYSE:MTZ) , Dycom Industries Inc. (NYSE:DY) and Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) in the Zacks Original post
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