Avnet Expands Share Repurchase Authorization to $600 Million and Increases Dividend by 6%

Rhea-AI Summary

Avnet (Nasdaq: AVT), a global technology solutions provider, has announced two significant shareholder-friendly moves. Firstly, the company's Board of Directors has increased its share repurchase authorization to $600 million. Secondly, Avnet has raised its regular quarterly cash dividend by 6% to $0.33 per share, payable on September 25, 2024, to shareholders of record as of September 11, 2024.

CEO Phil Gallagher emphasized Avnet's commitment to shareholder returns, noting that since fiscal year 2019, the company has returned nearly $2 billion to shareholders, including $1.4 billion in share repurchases and almost $600 million in dividends. These actions reflect confidence in Avnet's financial position and growth prospects.

Positive

• Increased share repurchase authorization to $600 million, potentially boosting shareholder value
• 6% increase in quarterly dividend to $0.33 per share, enhancing shareholder returns
• Nearly $2 billion returned to shareholders since fiscal year 2019, demonstrating consistent capital return policy
• Management expresses confidence in company's financial position and long-term growth goals

Negative

• Share repurchases may reduce cash available for strategic investments or operations
• Increased dividend payout may limit financial flexibility in economic downturns

Financial Analyst

Avnet's decision to expand its share repurchase program to $600 million and increase its dividend by 6% signals strong confidence in its financial stability and future prospects. This move is likely to be viewed positively by investors for several reasons:

• Enhanced shareholder value: The expanded buyback program can potentially boost earnings per share by reducing the number of outstanding shares.
• Increased dividend: The 6% hike in quarterly dividend to $0.33 per share offers improved returns for income-focused investors.
• Financial strength: The ability to return nearly $2 billion to shareholders since FY2019 demonstrates robust cash flow generation.

However, investors should also consider that these capital returns might limit funds available for growth initiatives or acquisitions. Overall, this news reflects Avnet's commitment to balancing shareholder returns with long-term growth strategies.

Market Research Analyst

Avnet's decision aligns with broader market trends where companies are increasingly focusing on shareholder returns amid economic uncertainties. This move could potentially impact Avnet's stock in several ways:

• Short-term boost: The announcement may lead to a positive stock price reaction as investors appreciate the increased returns.
• Improved attractiveness: Higher dividends and potential share price support from buybacks could make Avnet more appealing to value and income investors.
• Sector comparison: This move may pressure other technology solutions providers to review their capital return policies, potentially affecting sector-wide valuations.

It's important to monitor how this strategy affects Avnet's ability to invest in growth opportunities, especially in the rapidly evolving tech solutions market. The balance between shareholder returns and strategic investments will be key to Avnet's long-term competitiveness and stock performance.

PHOENIX--(BUSINESS WIRE)-- Avnet, Inc. (Nasdaq: AVT), a leading global technology solutions provider, today announced that on August 15, 2024, its Board of Directors approved an increase in Avnet’s share repurchase authorization, bringing the total amount available for share repurchases to $600 million.

The Board also approved a 6% increase in the regular quarterly cash dividend to $0.33 per share. The dividend will be paid on September 25, 2024, to shareholders of record as of the close of business on September 11, 2024.

“The Board’s actions underscore our commitment to providing consistent and dependable shareholder returns,” said Phil Gallagher, Avnet’s Chief Executive Officer. “Since the start of fiscal year 2019, we have returned nearly $2 billion to shareholders, including $1.4 billion in share repurchases and nearly $600 million in dividends. These actions reflect our continued confidence in Avnet’s financial position and ability to achieve our longer-term growth goals.”

The company may repurchase shares from time to time at the discretion of management in open market, privately negotiated transactions, or otherwise – subject to applicable laws, regulations and approvals, strategic considerations, market conditions and other factors. The company may terminate or limit the share repurchase program at any time without prior notice.

About Avnet

As a leading global technology distributor and solutions provider, Avnet has served customers’ evolving needs for more than a century. Decade after decade, Avnet helps its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com. (AVT_IR)

Visit the Avnet Investor Relations website at ir.avnet.com or contact us at investorrelations@avnet.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240819918592/en/

Investor Relations Contacts

Joe Burke, 480-643-7431

Joseph.Burke@avnet.com

Media Relations Contact

Jeanne Forbis, 480-643-7499

Jeanne.Forbis@avnet.com

Source: Avnet

FAQ

What is Avnet's new share repurchase authorization amount?

Avnet's Board of Directors has approved an increase in the share repurchase authorization, bringing the total amount available to $600 million.

How much has Avnet (AVT) increased its quarterly dividend?

Avnet has increased its regular quarterly cash dividend by 6% to $0.33 per share.

When will Avnet's (AVT) new dividend be paid?

The new dividend will be paid on September 25, 2024, to shareholders of record as of the close of business on September 11, 2024.

How much has Avnet (AVT) returned to shareholders since fiscal year 2019?

Since the start of fiscal year 2019, Avnet has returned nearly $2 billion to shareholders, including $1.4 billion in share repurchases and nearly $600 million in dividends.