Raytheon (RTN) Stock Rising on $2 Billion Share Buyback Program

Raytheon (RTN) stock is up after the company approved and increased its share repurchase authorization by $2 billion.
By Amanda Schiavo ,

NEW YORK (TheStreet) --Shares of Raytheon Co. (RTN) - Get Report are higher by 2.46% to $127 in pre-market trading on Thursday morning, after the defense and government markets company announced it has increased its share repurchase authorization by $2 billion.

The company's board has approved the repurchase of up to an additional $2 billion of the company's outstanding common stock. Share repurchases may take place from time to time at the company's discretion depending on market conditions, the company said in a statement.

Raytheon has also declared a quarterly cash dividend of 67 cents per outstanding share of common stock. The dividend is payable on February 4, 2016 to shareholders of record as of January 6, 2016.

Raytheon is an Aurora, CO-based technology company specializing in defense, security and civil markets across the globe.

Separately, TheStreet Ratings team rates RAYTHEON CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

We rate RAYTHEON CO (RTN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, solid stock price performance and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RTN's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 5.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Net operating cash flow has significantly increased by 159.66% to $1,101.00 million when compared to the same quarter last year. In addition, RAYTHEON CO has also vastly surpassed the industry average cash flow growth rate of 19.43%.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, RAYTHEON CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: RTN

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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