Stock Repurchase

Starbucks Puts Excess Cash To Work

Posted by Rick Stine on March 24, 2010
Dividends, Investing, Stock Buyback / 1 Comment

starbucksWe get reminders each day how far the economy and corporate Americas has snapped back – at least part of the way – from the depths of our great recession. Starbucks, which not long ago was going through a soul-searching to re-identify itself and cut costs (it closed many stores), announced today it was paying its first ever dividend. It is a modest 10 cent a share dividend, which will end up costing the company about $75 million. But the steps it took to improve profitability over the past year have allowed it to amass enough cash to not only pay out a dividend but authorize a new stock buyback program. It has grown its cash position pretty impressively. It had $1.35 billion of cash and short-term securities on its books at the end of December. That was up from $666 million in the quarter that ended September. Look for more companies to do the same thing.

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