GRAINGER INCREASES QUARTERLY DIVIDEND BY 10%; REFRESHES SHARE REPURCHASE AUTHORIZATION

Rhea-AI Summary

W.W. Grainger, Inc. (NYSE: GWW) announced a 10% increase in its quarterly cash dividend to $2.05 per share. The board also approved the repurchase of up to 5 million shares of common stock with no expiration date. This marks the 53rd consecutive year of increased dividends for Grainger, showcasing their commitment to shareholders.

Positive

• Increase in quarterly cash dividend by 10% to $2.05 per share.
• Approval of repurchase of up to 5 million shares of common stock with no expiration date.
• 53rd consecutive year of increased dividends for Grainger, demonstrating commitment to shareholders.

Negative

• None.

Insights

Financial Analyst

The announcement from W.W. Grainger, Inc. regarding the increase of their quarterly cash dividend by 10% to $2.05 per share represents a continuation of their historical approach to shareholder value. This decision not only reflects confidence in the company's financial health but also signals a commitment to reward investors. Dividend increases can be a positive signal to the market, often reflecting a company's strong cash flow and earnings stability. Investors typically view such dividend growth as an indicator of a company's financial robustness and its management's belief in future performance. The refreshed repurchase authorization of up to 5 million shares further suggests management’s belief that the stock may be undervalued or that they're seeking to increase earnings per share by reducing the number of shares outstanding. This could potentially lead to stock price appreciation as supply diminishes. However, investors should consider this alongside overall market conditions, as buybacks can sometimes be used to offset the dilutive effects of stock-based employee compensation.

Corporate Governance Expert

The announcement reflects Grainger's adherence to a policy of increasing shareholder returns that has lasted over half a century. This speaks to a culture of consistent financial policy and potentially stable corporate governance. For investors, this track record might reduce the perceived risk associated with the company. However, the impact of such policies should be assessed in relation to the company's investment in growth opportunities and overall financial strategy. While increasing dividends and repurchasing shares can signal strength, they also imply that the company currently prioritizes cash distribution over reinvestment or acquisitions. This could be seen as positive in terms of immediate returns, but one must also consider whether this aligns with long-term growth prospects, particularly in a changing economic landscape.

CHICAGO, April 24, 2024 /PRNewswire/ -- W.W. Grainger, Inc. (NYSE: GWW) announced today that its board of directors approved a quarterly cash dividend of $2.05 per share, an increase of 10% from the most recent company dividend. The dividend is payable on June 1, 2024, to shareholders of record on May 13, 2024.

In addition, the board approved the repurchase of up to 5 million shares of the company's outstanding common stock, replacing the company's existing repurchase authorization. The new repurchase authorization has no expiration date. As of December 31, 2023, the company had approximately 49.3 million shares of common stock outstanding.

"2024 is on track to be our 53rd consecutive year of increased dividends, upholding Grainger's long-standing commitment to our shareholders. This increase, together with our updated share repurchase authorization, reinforces our ability to continue investing in the business while also returning excess cash to shareholders," said D.G. Macpherson, Grainger Chairman and CEO.

About Grainger
W.W. Grainger, Inc., is a leading broad line distributor with operations primarily in North America, Japan and the United Kingdom. At Grainger, We Keep the World Working® by serving more than 4.5 million customers worldwide with products delivered through innovative technology and deep customer relationships. With 2023 sales of $16.5 billion, the Company operates two business models. In the High-Touch Solutions segment, Grainger offers approximately 2 million maintenance, repair and operating (MRO) products and services, including technical support and inventory management. In the Endless Assortment segment, Zoro.com offers customers access to more than 13 million products, and MonotaRO.com offers more than 22 million products. For more information, visit www.grainger.com.

View original content:https://www.prnewswire.com/news-releases/grainger-increases-quarterly-dividend-by-10-refreshes-share-repurchase-authorization-302126216.html

SOURCE W.W. Grainger, Inc.

FAQ

What is the new quarterly cash dividend per share announced by Grainger?

Grainger announced a quarterly cash dividend of $2.05 per share, reflecting a 10% increase.

How many shares of common stock can Grainger repurchase under the new authorization?

Grainger can repurchase up to 5 million shares of common stock under the new authorization.

When will the dividend be payable to shareholders?

The dividend will be payable on June 1, 2024, to shareholders of record on May 13, 2024.

Who is the Chairman and CEO of Grainger?

D.G. Macpherson serves as the Chairman and CEO of Grainger.