Mobile carrier T-Mobile US Inc. (NASDAQ: TMUS) announced Wednesday morning that the company’s board of directors have approved a stock repurchase program of up to $1.5 billion in T-Mobile common stock. The buyback program is authorized to run through the end of 2018.
Purchases under the program may be made from time to time, including open market purchases or privately negotiated transactions. Purchases by Deutsche Telekom, T-Mobile’s majority stockholder, will not be counted under the buyback program.
T-Mobile CEO John Legere said:
Since launching Un-carrier, T-Mobile has delivered unmatched growth and continues to take share in a rapidly changing and competitive wireless industry. This repurchase program underscores our Board of Directors’ and management team’s confidence in our business and our commitment to creating value for shareholders. Our strong balance sheet and cash flow generation give us the ability to return capital while continuing to make significant investments in our network and operations. 2018 is going to be another exciting year in wireless and we can’t wait to get started.
T-Mobile does not pay a dividend and hinted at its first stock buyback program in September at a Goldman Sachs conference. The company’s chief financial officer, Braxton Carter, had already floated the idea of paying a small dividend, but investors did not show much enthusiasm for that idea, Carter said at the time. He also noted, “We think we’re undervalued, and a buyback might be the best use of cash.”
The company’s cash flow guidance indicates a tripling from the 2016 level of $1.4 billion to $4.5 billion in 2019, according to a report from brokerage firm William Blair.
The fact that talks of a merger with Sprint went nowhere sort of makes this look like a consolation prize for stockholders, but they’ll take it anyway.
The buyback announcement sent the stock up about 1.3% in the late morning Wednesday, to trade at around $61.82 in a 52-week range of $54.60 to $68.88. The 12-month consensus price target on the stock is $71.22.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
