A Tale of Two Companies’ Buyback Programs
Wyndham Corp.'s disciplined approach to repurchases places it near the top of the S&P 500, while FLIR’s overspending lands it near the bottom.
By S.L. Mintz
The findings of Institutional Investors 2012 Corporate Buyback Scorecard may be most dramatically illustrated by a detailed comparison of two companies approaches. Seventh from the top of the buyback rankings table and first in consumer services, Wyndham Corp. follows a disciplined approach to putting cash flow into shareholders pockets through share repurchases. Since June 2010, $1.4 billion in buybacks has exceeded dividend payouts by more than 8 to 1.
But Wyndhams payback appears to validate the repurchases. The companys 63.1 percent buyback ROI was three times the consumer services median. Accounting for that was a buyback strategy that produced a return that was double the median in its sector and that dwarfed the 9.6 percent median for all companies, and effectiveness that produced a robust 12.6 percent return versus a negative 0.4 percent in its sector and a more dramatically worse negative 2.2 percent median overall.....