NEW YORK (TheStreet) -- Shares of ON Semiconductor Corp. (ONNN) are up 5.87% to $9.56 after the company announced that the board of directors approved a new capital allocation policy and a $1 billion share repurchase program.
The Phoenix-based semiconductor components company said that the new capital allocation policy would return approximately 80% of free cash flow less repayments of long-term debt to shareholders.
"The new capital allocation policy demonstrates ON Semiconductor's strong commitment towards efficient use of capital and maximizing shareholder value," CEO Keith Jackson said.
"The long term outlook for our business remains strong, driven by a robust design win pipeline, and we are confident in our ability to generate approximately $300 million to $400 million of annual free cash flow on a sustained basis in the near to mid-term," Jackson added.
Separately, TheStreet Ratings team rates ON SEMICONDUCTOR CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ON SEMICONDUCTOR CORP (ONNN) a HOLD. The primary factors that have impacted our rating are mixed--some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive."