LOS ANGELES - KB Home (NYSE: NYSE:KBH), a prominent homebuilder in the United States, has announced a significant increase in its quarterly cash dividend and a fresh authorization for stock repurchases. The company's Board of Directors has approved a 25% hike in the quarterly dividend, raising it to $0.25 per share from the previous $0.20 per share.
This increase brings the annualized dividend to $1.00 per share, correlating with a yield of approximately 1.6% based on KB Home's closing stock price on April 17, 2024.
In a strategic move to enhance shareholder value, the Board has also authorized a new share repurchase program of up to $1.00 billion, replacing the previous plan that had $113.6 million remaining.
The company has outlined its intention to continue buying back shares throughout 2024, with an estimated total repurchase ranging from $200 million to $400 million for the full year. This includes $50 million in share repurchases already completed in the first quarter of 2024.
The newly declared quarterly cash dividend, at the rate of $0.25 per share, is scheduled to be paid on May 23, 2024, to shareholders of record as of May 9, 2024.
Jeffrey Mezger, Chairman and Chief Executive Officer of KB Home, expressed confidence in the company's financial health and its ability to generate substantial operating cash flow. He emphasized the company's commitment to a balanced approach of investing in growth while simultaneously returning a meaningful level of cash to stockholders.
This announcement follows a pattern of dividend increases by KB Home, with a total rise of 67% in the last nine months, including a prior increment in July 2023. The company attributes these shareholder-friendly actions to its strong balance sheet and optimistic outlook for continued evolution into a larger and more profitable entity.
KB Home's reputation is built on its long-standing presence in the industry, with over 680,000 homes constructed across 47 markets in its 65-year history. The company is recognized for its customer-centric approach and its leadership in sustainable building practices, delivering a significant number of ENERGY STAR® certified homes.
The information in this article is based on a press release statement from KB Home.
InvestingPro Insights
KB Home (NYSE: KBH) has been proactive in its capital management, as reflected by the latest dividend increase and share repurchase program. With a market capitalization of $4.58 billion and a robust P/E ratio of 8.03, the company is trading at a low earnings multiple, which can be attractive to value investors.
The adjusted P/E ratio for the last twelve months as of Q1 2024 is even lower at 7.57, suggesting that the stock could be undervalued relative to its earnings.
InvestingPro Tips indicate that the management's strategy of aggressive share buybacks aligns with the company's strong free cash flow yield, which is a sign of financial health and the ability to return value to shareholders.
Moreover, the high shareholder yield is a result of both dividend payments and share repurchases, which have been a continuous practice for KB Home, maintaining dividend payments for 39 consecutive years.
Investors may also find comfort in the fact that analysts have revised their earnings upwards for the upcoming period, pointing to a positive outlook for the company's profitability. For those interested in exploring further insights and metrics, there are 14 additional InvestingPro Tips available, which can be accessed by visiting the InvestingPro platform. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Finally, KB Home's dividend growth over the last twelve months as of Q1 2024 stands at 33.33%, and the company's stock has seen a large price uptick over the last six months, with a six-month price total return of 41.33%. These metrics not only underscore KB Home's commitment to shareholder returns but also highlight the potential for capital appreciation.
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