The Home Depot (NYSE:HD) announced a recapitalization plan that includes an increase of $22.5 billion in its share repurchase program. The share repurchase will be funded in part by the sale of HD Supply as well as cash on hand and $12 billion of unsecured notes.
Details of the share repurchase will be announced at a later date. The company said that the recap returns significant capital to shareholders, lowers the cost of capital while retaining financial and operational flexibility.
The Home Depot is the world’s largest home improvement specialty retailer, with 2,184 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, 10 Canadian provinces, Mexico and China.
PAYOUT YIELD ANALYSIS
Home Depot plans to purchase up to 250 million shares. With 1.9 billion shares outstanding, this plan would return $5.26 per share. Combined with the annual dividend of $0.90 per share, the Total Payout is projected to $6.16 per share. At a $40 share price, the Total Payout Yield would be 15.4% if the program is completed over the next 4 quarters.
- Payout Yield Staff