Dillard’s Announces Stock Buyback Worth $500M; To Pay $0.15 Quarterly Dividend

Operator of retail department stores Dillard’s Inc. (DDS) has announced a new stock repurchase program worth $500 million of its Class A common stock.

Under Dillard’s previous share repurchase program announced in 2018, a buyback of $114.3 million remains pending.

Under the new buyback program, the company can acquire securities via open market transactions as well as private negotiations.

Furthermore, Dillard’s has also declared a cash dividend of $0.15 on its Class A and Class B common shares.

The dividend is payable on August 2 to investors of record as of June 30. Notably, this is Dillard’s 209th consecutive quarterly dividend since the company went public in 1969. (See Dillard’s stock analysis on TipRanks)

Currently, Dillard’s operates 282 stores, which include 32 clearance centers along with an online presence via dillards.com.

On May 14, Telsey Advisory analyst Dana Telsey reiterated a Hold rating on the stock and increased the price target to $110 (12.3% downside potential) from $80.

Dillard’s stock closed about 22.7% higher on Friday after the company registered earnings per share of $7.25 versus a net loss per share of $6.94 a year ago. Revenue surged to $1.33 billion from $787 million in Q1 2020.

Telsey noted broader strength coupled with higher than estimated revenue growth, elevated gross margin leverage, and streamlining of SG&A expenses during this period.

The other analyst covering the stock, Deutsche Bank’s Paul Trussell also has a Hold rating on the stock with a $107 (14.6% downside potential) price target.

The two ratings add up to a Hold consensus rating alongside an average analyst price target of $108.50 implying 13.4% downside potential. Shares have gained 373.4% over the past year.

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