After the close on Tuesday, Bristol-Myers Squibb (BMY) announced a headline grabbing additional $3 billion share-repurchase program. With a market cap approaching $60 billion, investors quickly gravitated to the potential for a repurchase of 5% of the outstanding shares.
Not so fast! Further details in the announcement indicate that the last $3 billion repurchase plan hasn't even been completed in the two years since its announcement in May 2010. Not to mention research indicates that the net buyback will be significantly lower due to large amounts of stock options.
Figure 1 below highlights the actual net payout yields (net buyback + dividend) for the last five quarters. Not as appetizing as originally presented by the headline grabbing number.
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