PulteGroup hikes dividend by 13%, approves $300 million inventory buyback

Home builder PulteGroup approved a $ 300 mil stock buyback plan on Wed. amid strong cash flow

Investing.com — Coming off a strong third quarter, PulteGroup Inc (N:) said on Wednesday evening that its Board of Directors has raised its quarterly dividend and authorized a $ 300 million stock repurchase plan effective early next year.

PulteGroup, one of the largest homebuilding companies in the U.S., declared a quarterly cash dividend of $ 0.09 per common share payable on January 5 to shareholders of record at the close of business on December 15. The 0.09 per share dividend represents a 13% increase in the Company’s quarterly payment.

The company also announced on Wednesday that its Board will increase its $ 750 million share repurchase authorization program by $ 300 million. Upon the completion of the third quarter, Pulte had $ 305 million available under the existing repurchase authorization.

“PulteGroup’s strong balance sheet and cash flow generation gives us the flexibility to invest in our business and to return funds to shareholders in the form of dividends and share repurchases,” said Richard J. Dugas, Jr., Chairman, President and Chief Executive Officer of PulteGroup. “We believe this disciplined approach to capital allocation is clearly aligned with our fundamental goal of delivering superior total shareholder returns through the housing cycle.”

During the company’s third quarter, which ended in late-September, the company’s gross margin increased to 23.6%, up 70 basis points from the same quarter in 2014. Net signups also rose by 8% to 4,092 homes, as its signup dollars totaled $ 1.5 billion.

In October, the National Association of Realtors reported that new home sales are up only 4.9% this year, amid escalating prices for first-time homebuyers. U.S. construction spending hit an eight-year high in October, as residential construction surged by 16.6% on an annual basis.

Shares in Pulte Group were flat in after-hours trading, after ending the regular session at 19.08, down 0.57 or 2.90%.

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PulteGroup hikes dividend by 13%, approves $300 million inventory buyback