Texas Roadhouse Inc (TXRH), a casual dining restaurant chain, in a bid to optimize shareholders’ return, recently announced a new share repurchase program and a quarterly dividend payout.
The newly announced share repurchase program authorizes the company to buy back $50.0 million worth shares through open market transactions. In the first six month of 2011, Texas repurchased 1,500,000 shares for a total purchase price of $25.3 million.
The Louisville, Kentucky-based company also declared a quarterly dividend of 8 cents per share to be paid on September 30, 2010, to stockholders of record as of September 14, 2011. The company initiated its quarterly dividend distribution on February 17, 2011, with an intention to boost shareholder value.
Share repurchases and dividends reflect the company’s sound financial position and well-defined future prospects. It enhances the shareholders’ return and boosts the market value of the stock. At the end of the second quarter of 2011, the company had cash and cash equivalent of $79.4 million.
We appreciate the effort of the company to enhance shareholder returns, even in the back drop of an economic downturn.
Recently, Texas also announced that its chief executive officer (CEO) and president – G.J. Hart has resigned to pursue the same position at California Pizza Kitchen. Kent Taylor, who had served as the CEO of the company from May 2000 to October 2004, has stepped up to the role.
Currently, we have a long-term 'Neutral' recommendation on Texas, which competes with Red Robin Gourmet Burgers Inc (RRGB). However, the company holds a Zacks #4 Rank, which translates into a short-term ‘Sell’ recommendation.
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TEXAS ROADHOUSE (TXRH): Free Stock Analysis Report
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