Tennant Company TNC, on Jun 22, announced that its board of directors has authorized the repurchase of an additional one million common shares from the open market and privately negotiated transactions. The news lifted investors’ sentiments, leading to a 0.8% increase in the company’s share price.
As disclosed, Tennant has approximately 18.3 million shares outstanding as well as nearly 185,000 shares remaining under its existing buyback authorization. No time frame has been fixed for execution of the additional program.
The repurchase activity, to some extent, will nullify the dilutive impact of share-based compensations paid by Tennant as well as enhance the return to its shareholders. Also, the program reflects the company’s sound liquidity position. In first-quarter 2015, the company rewarded its shareholders with dividend payments of $3.7 million and share buyback worth $4.1 million.
Moreover, Tennant continues to work diligently for improving its technology and product-line and, subsequently, its profitability. By 2017, the company targets to achieve revenues of $1 billion; while for 2015, it anticipates net sales within $825−$855 million. Organic sales are expected to remain strong for the current year.
The Zacks Consensus Estimate for Tennant Company is currently pegged at $2.59 per share for 2015 and $3.18 per share for 2016. These estimates represent year-over-year decline of 4.3% for 2015 and growth of 23% for 2016.
With a market capitalization of $1.2 billion, Tennant Company currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the machinery industry include EnPro Industries, Inc. NPO, The Middleby Corp. MIDD and Omnitek Engineering Corp. OMTK. All these stocks carry a Zacks Rank #2 (Buy).
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