MIAMI - Ryder System, Inc. (NYSE: NYSE:R), a leader in logistics and transportation solutions, has announced a new share repurchase initiative authorized by its Board of Directors. The program, commencing from October 9, 2024, permits the management to repurchase up to 2.0 million shares of its common stock over the next two years, ending October 9, 2026.
This strategic move aims to offer Ryder management increased capital structure flexibility and aligns with the company's goals concerning balance sheet leverage, potential acquisition opportunities, and enhancing shareholder returns. The announcement follows the completion of a similar 2.0 million share repurchase program authorized in October 2023 and concluded in September 2024.
Ryder's Chairman and Chief Executive Officer, Robert Sanchez, commented on the company's robust earnings from its contractual lease, dedicated, and supply chain operations. He stated, "The earnings power of our contractual lease, dedicated, and supply chain businesses allows us to continually invest in profitable growth and strategic initiatives while also returning capital to shareholders." Sanchez expressed confidence in Ryder's restructured business model, which he believes lays a strong foundation for growth and capital deployment that adds value.
In addition to the new discretionary share repurchase program, Ryder is continuing with an anti-dilutive share repurchase program, which was authorized in October 2023 to offset the dilutive effect of shares issued under employee stock plans. Under this ongoing program, the company can repurchase up to 2.0 million shares by October 12, 2025. As of September 30, 2024, 753,000 shares have been bought back under this scheme.
Share repurchases may be conducted sporadically through open-market transactions, leveraging the company's working capital, and adhering to Rule 10b5-1 trading plans as per the Securities Exchange Act of 1934. The timing and volume of repurchases are contingent on market conditions, legal requirements, and various other factors. Ryder reported approximately 42.3 million shares of common stock outstanding as of the end of September 2024.
Ryder System, Inc. is renowned for providing comprehensive logistics solutions, including fleet management and supply chain services, to prominent brands across North America. The company's extensive network includes 760 maintenance facilities and nearly 300 warehouses, managing a fleet of nearly 250,000 commercial vehicles.
This news is based on a press release statement and includes forward-looking statements subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from expectations.
In other recent news, Ryder System, Inc. and Terminal Industries have reported the successful implementation of an artificial intelligence pilot program aimed at optimizing warehouse yard operations. The initiative has processed over 10,000 truck detections with 99% accuracy. The company has also launched a second pilot using the technology on mobile tablets for automatic inventory capture.
Ryder has recently outperformed expectations in its Q2 2024 earnings, bolstered by strategic acquisitions such as Cardinal Logistics and Impact Fulfillment Services. Despite this, the company revised its full-year 2024 free cash flow forecast to negative $175 million to $275 million due to challenges in the used vehicle sales and rental market.
Analysts from Baird have upgraded Ryder Systems' price target to $155, maintaining an Outperform rating. Stephens and Morgan Stanley have also adjusted their price targets for the company, expressing caution due to uncertainties in the used vehicle and rental markets.
Ryder has announced plans to acquire Pit Stop Fleet Service, aiming to expand its mobile maintenance service, Torque by Ryder™, across 20 states. This acquisition is expected to generate $24 million in gross revenue by 2025. Lastly, Ryder has increased its quarterly cash dividend to $0.81 per share, marking the company's 192nd consecutive quarterly payment.
InvestingPro Insights
Ryder System's recent announcement of a new share repurchase program aligns well with several key financial metrics and trends identified by InvestingPro. According to InvestingPro data, Ryder's market capitalization stands at $6.56 billion, with a P/E ratio of 13.55, indicating a relatively attractive valuation in the current market.
The company's commitment to shareholder returns is further evidenced by its dividend practices. InvestingPro Tips highlight that Ryder "has maintained dividend payments for 49 consecutive years," demonstrating a long-standing commitment to returning value to shareholders. This is complemented by a current dividend yield of 2.14% and an impressive dividend growth of 30.65% over the last twelve months.
Ryder's financial performance appears robust, with revenue reaching $12.23 billion in the last twelve months as of Q2 2024, and an operating income margin of 7.52%. These figures support CEO Robert Sanchez's comments on the company's strong earnings power from its core operations.
The company's stock performance has been particularly noteworthy. InvestingPro Tips indicate a "high return over the last year" and that the stock is "trading near 52-week high." This is corroborated by the impressive total price returns of 34.26% over the past six months and 53.15% over the last year.
Interestingly, InvestingPro Tips also note that "management has been aggressively buying back shares," which aligns perfectly with the newly announced repurchase program. This consistent approach to share buybacks suggests management's confidence in the company's valuation and future prospects.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. In fact, there are 8 more InvestingPro Tips available for Ryder System, providing a deeper understanding of the company's financial health and market position.
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