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CVS Caremark ramps up share buybacks
August 24th, 2011
WOONSOCKET, R.I. – As a share repurchase program begun last year winds down, CVS Caremark Corp. is planning another one twice as large.
The company said Wednesday that its board has authorized up to $4 billion in buybacks of its common stock.
The new program, which goes into effect immediately, allows CVS Caremark to repurchase stock via the open market, privately negotiated transactions, accelerated share repurchase transactions and/or other derivative transactions.
This year, as scheduled, CVS Caremark plans to wrap up a $2 billion buyback program authorized in June 2010. The company reported that it expects to repurchase about $1 billion in shares under the new authorization by the end of 2011.
"We're very pleased with the board's decision. We believe it reflects their continued confidence in the future growth of CVS Caremark as well as an ongoing commitment to increase shareholder value," Dave Denton, executive vice president and chief financial officer at CVS Caremark, said in a statement.
"Over the next several years, we expect to generate significantly more free cash flow than what we've generated in the past several years," Denton added. "We have a disciplined approach to capital allocation that encompasses investing in internal projects that meet our return hurdles and utilizing our remaining free cash flow to increase shareholder value through dividends and share repurchases. We intend to continue to review our dividend annually and to do share repurchases that are value enhancing."