Delta raises dividend and plans to complete $5 billion share repurchase $DAL

Johnny HopkinsStocksLeave a Comment

As Tobias recently tweeted about Delta Air Lines, Inc. (NYSE:DAL)

The best performing stock in The Acquirers Multiple Large Cap Screener midweek is DAL Delta Air Lines Inc. up 5.4 percent to 43.86

The reason for the jump is the company’s latest announcement to analysts that it’s set to increase its regular dividend to $625 million per year.

Delta stated that, “The dividend represents a long-term commitment to consistently return cash to our owners”.

The annual dividend per share will increase to $0.81, from $0.54, in the September quarter – representing a 2% yield at the current stock price.

Delta also says it is planning to complete its $5 billion share repurchase authorization by May 2017.

“Delta has demonstrated a willingness to accelerate buybacks with excess free cash flow. This is the 3rd share repurchase authorization to be completed ahead of schedule”.

The plan to complete the remaining $3 billion of 2015 share repurchase includes $375 million ASR in the June 2016 quarter.

In more good news for the company, Delta is targeting $4 billion in adjusted net debt by 2020.

“Balance sheet progress recognized with investment grade rating by Moody’s – One notch away from investment grade by S&P and Fitch”.

Delta has reduced its debt by roughly $10 billion since 2009 and has reduced its interest expense by $900 million.

(Source: Company Reports)

I’ve been a long time fan of Delta. We have it at #7 in the Large Cap Screener. The company has an Enterprise Value of $39 billion, and operating earnings of $7.9 billion, giving it an Acquirer’s Multiple of 4.94. Delta is trading on a P/E of just 7 and has a Free Cash Flow to Enterprise Value yield of 9%, so it represents great value.

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