Saturday, December 3, 2022
Home Business Funding Synopsys' (SNPS) Buyback Plan to Boost Shareholders' Wealth

Synopsys’ (SNPS) Buyback Plan to Boost Shareholders’ Wealth

This story originally appeared on Zacks

Continuing with its efforts to enhance shareholder value, Synopsys SNPS recently announced that its board of directors approved a new share repurchase program to buy back up to $1 billion of its common stock.

– Zacks

The stock-buyback program at Synopsys has been in effect since 2002 and the allotted capital has been refilled depending on fund availability. However, SNPS is not obligated to buy back any specific number of shares and the program might be terminated depending on the company’s decision.

Synopsys completed its share-repurchase authorization through accelerated share repurchase arrangements. During fiscal 2021, the company purchased $753 million of its common stock. Since 2015, it has bought back approximately $3 billion of stocks.

Share repurchasing actions are a prudent way of maximizing shareholders’ wealth and generating more value. Synopsys’s latest stock buyback program indicates its commitment toward delivering a long-term shareholder value and reflects its confidence in the financial position and ability to generate sufficient cash flows.

Speaking of Synopsys’ financial position, the company ended fiscal 2021 with cash and cash equivalents of $1.58 billion. Also, the company generated cash flow of $1.49 billion from operating activities.

Apart from strategic investments, a continued focus on the shareholder-friendly initiatives should boost the company’s shares. SNPS rallied 39.8% in the past year, outperforming the Zacks Computer – Software sector’s increase of 26%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Currently, Synopsys carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Companies that have a consistent record of returning value through share repurchases and dividend payments are Apple AAPL, Cisco CSCO and Microsoft MSFT.

In fiscal 2021, Apple returned approximately $100.5 billion through dividend payouts ($14.5 billion) and share repurchases ($86 billion). Cisco bought back $2.9 billion of its common stock and paid $6.2 billion in dividends in fiscal 2021. Microsoft paid $16.5 billion in dividends and repurchased its common stock worth $27.4 billion in fiscal 2021.

Dividend and share repurchase initiatives likely raise the market value of the stock and enhance shareholder returns. Thus, companies boost investors’ confidence through share repurchases and dividend payouts, persuading them to either buy or hold the scrip.

Apple, Microsoft and Cisco, all carry a Zacks Rank #3. The long-term estimated earnings growth for Synopsys, AAPL, MSFT and CSCO is pegged at 14.9%, 12.5%, 12% and 6.5%, respectively.

Investor Alert: Legal Marijuana Looking for big gains?

Now is the time to get in on a young industry primed to skyrocket from $13.5 billion in 2021 to an expected $70.6 billion by 2028.

After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could kick start an even greater bonanza for investors. Zacks Investment Research has recently closed pot stocks that have shot up as high as +147.0%.

You’re invited to immediately check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.

Today, Download Marijuana Moneymakers FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Apple Inc. (AAPL): Free Stock Analysis Report
 
Microsoft Corporation (MSFT): Free Stock Analysis Report
 
Cisco Systems, Inc. (CSCO): Free Stock Analysis Report
 
Synopsys, Inc. (SNPS): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Most Popular

Tkachuk scores 2 late as Senators beat Rangers 3-2 in OT

NEW YORK (AP) — Brady Tkachuk scored the tying goal for Ottawa in the final minute of regulation and won it with a backhander...

Goggia resumes winning ways in Lake Louise, takes season’s 1st women’s downhill

Sofia Goggia picked up where she left off in Lake Louise, Alta. The Italian ski racer’s win Friday in the season-opening women’s World Cup downhill...

Nets build huge lead to beat Raptors 114-105

NEW YORK (AP) — Kyrie Irving scored 27 points and the Brooklyn Nets built a huge lead before beating the Toronto Raptors 114-105 on...

Laine scores twice as Jackets snap Jets win streak

After a dominant win over the defending champs, the Winnipeg Jets were flying high, but an old friend helped bring them back to earth Friday...