Market News

Kroger Unveils New $1B Share Buyback Plan

The Kroger Co. (NYSE: KR), an American retailer, disclosed that its board of directors has authorized a new common stock repurchase program of $1 billion. Notably, the new program replaces the prior authorization, which had around $157 million remaining as of December 29, 2021. 

Kroger CEO Rodney McMullen said, “We are customer obsessed and focused on leading with fresh and accelerating with digital, which is building momentum in our business and will drive Kroger’s long-term success. Kroger’s share repurchase authorization reflects our Board of Directors’ confidence in the strength of our free cash flow and our ability to deliver consistently strong and attractive total shareholder returns.” 

Dividend History 

In the second quarter of 2021, Kroger increased its common stock dividend by 17%, marking the 15th consecutive year of dividend increases. 

On September 15, Kroger’s Board of Directors announced a quarterly dividend of $0.21 per share, which was paid on December 1, 2021, to shareholders of record as of November 15. The company’s annual dividend of $0.84 per share reflects a dividend yield of 1.86%.   

Wall Street’s Take 

Recently, Morgan Stanley analyst Simeon Gutman maintained a Sell rating on the stock but lifted the price target to $38 (15.82% upside potential) from $37. 

Overall, the stock has a Hold consensus rating based on 1 Buy, 10 Holds, and 3 Sells. The average Kroger price target of $44.21 implies 2.06% downside potential. Shares have gained 45.1% over the past year. 

Hedge Fund Activity 

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Kroger is currently Neutral, as the cumulative change in holdings across all 8 hedge funds that were active in the last quarter was an increase of 29,900 shares.

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