NRG Energy, Inc. NRG stated that it will repurchase shares worth $100 million of its common stock. The latest share buyback authorization comes under the company’s current 2015 capital allocation program. Its board of directors has already approved the share repurchase program with immediate effect.
Upon regulatory approvals, NRG Energy will utilize its cash on hand to finance the share repurchase. The company intends to carry out the share repurchase program in favorable market scenarios.
NRG Energy’s capital allocation program comprises share buybacks, dividend payment, strategic acquisitions, business reinvestment and debt reduction.
NRG Energy frequently repurchases shares to return value to its shareholders. In Dec 2014, the board of directors approved a share repurchase program worth $100 million of its common stock. It was concluded in Feb 2015.
As of Dec 31 2014, NRG Energy purchased over 1.62 million shares of its common stock for around $44 million. The company repurchased the remaining portion during first-quarter 2015.
NRG Energy maintains a stable liquidity profile backed by strong cash generating capacity. The company’s cash and cash equivalents at 2014 end were around $2,116 million. Net cash from operating activities in 2014 surged 18.9% year over year to $1,510 million.
A strong financial position allows NRG Energy to pursue investor-friendly initiatives, including effective share buybacks and regular dividend payments.
On Feb 17, 2015, the company paid a quarterly dividend of 15 cents, up a penny from the previous payout to shareholders of record as of Feb 2 as announced on Jan 20.
In 2015, NRG Energy plans to return $250 million to its shareholders, including the payment of around $195 million as common stock dividend.
NRG Energy’s efforts on maximizing shareholder wealth will help it to attract investors to the stock.
NRG Energy currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry are DTE Energy Company DTE, PG&E Corporation PCG and Public Service Enterprise Group Inc. PEG, each carrying a Zacks Rank #2 (Buy).
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