Samsung Electronics is expected to unveil a shareholder return program in the coming weeks that could match the scale of its 2017 initiative, according to a Meritz Securities report cited by Citrini analyst Jukan and reported by BlockBeats on July 30. The report said the move would mark the company’s first restart of an “early execution plan” in nearly 10 years.
Meritz outlined several measures it expects to see: a higher dividend, a change in free cash flow calculations so that M&A spending is no longer deducted, and a commitment to return 50% of free cash flow to shareholders. The report also said Samsung management has acknowledged that the recent drop in the company’s share price has left the stock undervalued.
On that basis, buybacks and share cancellations, both seen as direct ways to lift shareholder value, are expected to come first. Samsung shares had been under pressure in July due to a broader pullback in memory-chip stocks and structural factors tied to forced liquidations in leveraged ETFs. The stock still trades at a notable discount to its June high, the report said.
Samsung Electronics is expected to announce a shareholder return plan in the coming weeks that could be comparable in size to its aggressive 2017 program, according to a Meritz Securities report cited by Citrini analyst Jukan and reported by BlockBeats on July 30.
The report said the move would mark the first time in nearly a decade that Samsung has restarted an “early execution plan.” Expected measures include a higher dividend, excluding M&A spending from free cash flow calculations, and returning 50% of free cash flow to shareholders.
Meritz also said Samsung management has acknowledged that the recent decline in the company’s share price has left the stock undervalued. As a result, actions that directly raise shareholder value, including share buybacks and cancellations, are expected to be implemented first.
Samsung came under pressure in July as the memory-chip sector pulled back broadly and leveraged ETFs faced forced liquidations driven by structural factors. The company’s shares still trade at a significant discount to their June high. If the return plan is carried out, it would signal a structural shift in Samsung’s capital allocation strategy, away from conservative expansion and toward shareholder returns.
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