Syntel, Inc. (NASDAQ:SYNT), a global provider of digital transformation, information technology and knowledge process services to Global 2000 companies, announced that its Board of Directors has declared a special cash dividend of $15 per share.
The special cash dividend, is payable on October 3, 2016, to shareholders of record at the close of business on September 22, 2016. Due to the size of the dividend, it is anticipated that the Company’s common stock will begin trading ex-dividend (without the dividend), the first business day following the dividend payable date, or October 4, 2016.
The special cash dividend will be funded through dividends to the Company by U.S. subsidiaries, the one-time repatriation of approximately $1.24 billion of cash held by the Company’s foreign subsidiaries and a portion of borrowings under a new senior credit facility. The Company has expanded its borrowing capacity to $500 million under the new senior credit facility while paying in full and terminating the $200 million prior existing senior credit facility.
In connection with the one-time repatriation, the Company expects to recognize a one-time tax expense of about $264 million (net of foreign tax credits) in the third quarter of 2016. As a result of the additional tax expense and anticipated changes to “other income” which will result from the issuance of the special cash dividend, the Company is revising its outlook for 2016 EPS from the previously announced $2.55 to $2.70 earnings per share to a loss of $0.60 to $0.75 per share. There is no update at this time to the outlook for 2016 revenue or margins.
Additional details can be found in the Company’s Form 8-K filed with the Securities and Exchange Commission on September 12, 2016. (Original Source)
Shares of Syntel are up nearly 11% to $45.09 in early trading Monday. SYNT has a 1-year high of $50.92 and a 1-year low of $40.68. The stock’s 50-day moving average is $45.22 and its 200-day moving average is $45.49.
On the ratings front, Syntel has been the subject of a number of recent research reports. In a report issued on September 2, Cantor analyst Joseph Foresi reiterated a Hold rating on SYNT, with a price target of $43, which represents a potential downside of 6.6% from where the stock is currently trading. Separately, on July 22, J.P. Morgan’s Puneet Jain reiterated a Hold rating on the stock and has a price target of $47.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joseph Foresi and Puneet Jain have a total average return of -2.4% and 19.8% respectively. Foresi has a success rate of 37% and is ranked #3604 out of 4124 analysts, while Jain has a success rate of 71% and is ranked #991.
Syntel, Inc. engages in the provision of digital transformation, information technology and knowledge process outsourcing services. It operates through the following segments: Banking and Financial Services, Healthcare and Life Sciences, Insurance, Retail, Logistics, Telecom and Manufacturing. The Banking and Financial Services segment serves financial institutions. The Healthcare and Life Sciences segment provides services to healthcare payers, providers and pharmaceutical and medical deice providers. The Insurance segment serves insurance service provider. The Retail, Logistics and Telecom segment serves supermarkets, specialty premium retailers, department stores and large mass-merchandise discounters. The Manufacturing segment provides business consulting and technology services.