Wednesday, August 24, 2011

Lockheed Martin's 'Accidental' High Net Payout Yield


Today Lockheed Martin (LMT) announced an additional $1B stock buyback on top of the current $3B authorization that is expected to reach its limit soon. While the news appears good, market analysts have lately become very bearish on stock buybacks. See interview of Joshua Brown from Fusion Analytics. Note though he claims Cisco Systems (CSCO) is the worst in issuing new shares, the latest quarterly report shows a nearly 300M share drop from last year - 5,795M to 5,496M shares.
The key points missing from this interview is that investors naturally want to focus on companies that actually follow through on the announcement and ones that have net buybacks, ones that reduce the outstanding shares rather than just replacing the stock option issuance.

Read the full article at Seeking Alpha. 

Disclosure: Long CSCO and LMT in Net Payout Yield modle. Please review the disclaimer page for more details. 


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