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CBRE Group (CBRE) Cheers Investors With a $2B Buyback Increase
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CBRE Group (CBRE - Free Report) recently received the board of directors' nod for a $2-billion increase in its stock repurchase authorization. This stock buyback authorization is effective immediately.
What is encouraging is that this latest authorization is in addition to the existing $2-billion authorization, which has roughly $898.4 million remaining as of Jul 31, 2022. The latest increase in the share repurchasing authorization is a prudent way of maximizing shareholders’ wealth and generating more value. The move also reflects CBRE’s confidence in its financial position and ability to generate sufficient cash flows.
CBRE Group also noted that share repurchases to be made in connection with the program are likely to be executed through open market transactions, privately negotiated transactions or any other way as determined by the company and that includes through plans complying with Rule 10b5-1 under the Exchange Act.
Moreover, the stock repurchase program may be extended, suspended or discontinued at any time without notice. Ultimately, such efforts are a strategic fit as these provide additional flexibility within CBRE’s capital-allocation framework and scope for book value creation.
In the second quarter of 2022, CBRE Group repurchased 7.5 million shares at an average price of $81.39, spending around $611.2 million.
As the largest commercial real estate services and investment firm (based on 2021 revenues), the company enjoys a robust scale. It is among a few companies offering a full suite of services to multinational clients. Moreover, the company has grown organically and banked on strategic in-fill acquisitions to boost its service offerings and geographic reach.
The company continues to benefit from diversifying across asset types, business lines, client types and geographies as well as expanding its resilient business in recent years. Given the size and scale of the company, CBRE Group has compelling opportunities to expand near-term earnings, and this is likely to translate to higher shareholder returns.
Speaking of CBRE’s financial position, the company is rich in cash and boasts a sturdy cash-flow generating ability. As of Jun 30, 2022, the company had $4.2 billion in total liquidity. This comprised $1.2 billion in cash in addition to the ability to borrow a total of $3.0 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.20 as of the same date. This is significantly less than CBRE Group’s primary debt covenant of 4.25X.
Moreover, early in August, CBRE Group expanded its revolving credit facility from $3.15 billion to $3.5 billion by entering into a new five-year revolving credit agreement. The move was part of its efforts to boost its liquidity position and flexibility.
Shares of this Zacks Rank #3 (Hold) company have outperformed the industry it belongs to so far in the quarter. Its shares have risen 10.3% compared with the industry’s growth of 8.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the real estate sector are Colliers International Group Inc. (CIGI - Free Report) and FirstService Corp. (FSV - Free Report) .
The Zacks Consensus Estimate for Colliers International Group’s 2022 EPS has moved 4% upward in the past month to $7.50. CIGI sports a Zacks Rank #1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FirstService’s current-year EPS is pegged at $4.28. The consensus mark for 2022 revenues stands at $3.7 billion, implying growth of 12.2% year over year. FSV sports a Zacks Rank #1 at present.
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CBRE Group (CBRE) Cheers Investors With a $2B Buyback Increase
CBRE Group (CBRE - Free Report) recently received the board of directors' nod for a $2-billion increase in its stock repurchase authorization. This stock buyback authorization is effective immediately.
What is encouraging is that this latest authorization is in addition to the existing $2-billion authorization, which has roughly $898.4 million remaining as of Jul 31, 2022. The latest increase in the share repurchasing authorization is a prudent way of maximizing shareholders’ wealth and generating more value. The move also reflects CBRE’s confidence in its financial position and ability to generate sufficient cash flows.
CBRE Group also noted that share repurchases to be made in connection with the program are likely to be executed through open market transactions, privately negotiated transactions or any other way as determined by the company and that includes through plans complying with Rule 10b5-1 under the Exchange Act.
Moreover, the stock repurchase program may be extended, suspended or discontinued at any time without notice. Ultimately, such efforts are a strategic fit as these provide additional flexibility within CBRE’s capital-allocation framework and scope for book value creation.
In the second quarter of 2022, CBRE Group repurchased 7.5 million shares at an average price of $81.39, spending around $611.2 million.
As the largest commercial real estate services and investment firm (based on 2021 revenues), the company enjoys a robust scale. It is among a few companies offering a full suite of services to multinational clients. Moreover, the company has grown organically and banked on strategic in-fill acquisitions to boost its service offerings and geographic reach.
The company continues to benefit from diversifying across asset types, business lines, client types and geographies as well as expanding its resilient business in recent years. Given the size and scale of the company, CBRE Group has compelling opportunities to expand near-term earnings, and this is likely to translate to higher shareholder returns.
Speaking of CBRE’s financial position, the company is rich in cash and boasts a sturdy cash-flow generating ability. As of Jun 30, 2022, the company had $4.2 billion in total liquidity. This comprised $1.2 billion in cash in addition to the ability to borrow a total of $3.0 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was 0.20 as of the same date. This is significantly less than CBRE Group’s primary debt covenant of 4.25X.
Moreover, early in August, CBRE Group expanded its revolving credit facility from $3.15 billion to $3.5 billion by entering into a new five-year revolving credit agreement. The move was part of its efforts to boost its liquidity position and flexibility.
Shares of this Zacks Rank #3 (Hold) company have outperformed the industry it belongs to so far in the quarter. Its shares have risen 10.3% compared with the industry’s growth of 8.2%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the real estate sector are Colliers International Group Inc. (CIGI - Free Report) and FirstService Corp. (FSV - Free Report) .
The Zacks Consensus Estimate for Colliers International Group’s 2022 EPS has moved 4% upward in the past month to $7.50. CIGI sports a Zacks Rank #1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FirstService’s current-year EPS is pegged at $4.28. The consensus mark for 2022 revenues stands at $3.7 billion, implying growth of 12.2% year over year. FSV sports a Zacks Rank #1 at present.