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Garrett Motion to Boost Shareholder Value Via Dividend & Buybacks
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Garrett Motion Inc. (GTX - Free Report) , a leading provider of automotive technology, has introduced a long-term capital allocation framework aimed at returning at least 75% of its Adjusted Free Cash Flow to shareholders over time. This will be achieved through share buybacks and a regular quarterly cash dividend. As part of this initiative, the board of directors has approved a new dividend policy, targeting a total payout of approximately $50 million in 2025.
The first dividend under this plan, set at 6 cents per share, will be paid on Jan. 31, 2025, to shareholders on record as of Jan. 15, 2025. Moreover, the board has authorized a 2025 share repurchase program of up to $250 million. Per Olivier Rabiller, president and CEO of Garrett, these measures are designed to provide a competitive dividend yield while emphasizing Garrett's commitment to creating shareholder value and investing strategically in its turbo and zero-emission technologies.
The framework leverages Garrett’s robust cash generation and flexible cost structure and aligns with its existing capital priorities. The company remains focused on balanced R&D investments, particularly in zero-emission solutions and expanding turbo technologies for hybrid and industrial applications. This initiative builds on Garrett's previous repurchase of $438 million in stock since the conversion of its Series A Preferred Stock through the third quarter of 2024 and its efforts to reduce debt by approximately $400 million during the same period.
While Garrett aims to return 75% or more of Adjusted Free Cash Flow to shareholders, actual returns will depend on market conditions, stock prices and alternative capital uses. Dividends and share repurchases will be managed at the board’s discretion and subject to applicable regulations. The repurchase program allows flexibility in timing and methods, including open market transactions, block trades, or private negotiations, and can be suspended or terminated as needed.
In the third quarter of 2024, Garrett reported net sales of $826 million, which declined from $960 million in the third quarter of 2023. As of Sept. 30, 2024, the company’s cash and cash equivalent amounted to $96 million, down from $259 million as of Dec. 31, 2024. Long-term debt totaled $1.46 billion, down from $1.64 billion as of Dec. 31, 2024.
The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved 75 cents and 88 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for TSLA’s 2024 sales suggests year-over-year growth of 2.97%. EPS estimates for 2024 have improved 22 cents in the past 60 days. EPS estimates for 2025 have improved 7 cents in the past seven days.
The Zacks Consensus Estimate for BLBD’s fiscal 2025 sales and earnings suggests year-over-year growth of 10.97% and 12.14%, respectively. EPS estimates for fiscal 2025 have improved 18 cents in the past 30 days.
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Garrett Motion to Boost Shareholder Value Via Dividend & Buybacks
Garrett Motion Inc. (GTX - Free Report) , a leading provider of automotive technology, has introduced a long-term capital allocation framework aimed at returning at least 75% of its Adjusted Free Cash Flow to shareholders over time. This will be achieved through share buybacks and a regular quarterly cash dividend. As part of this initiative, the board of directors has approved a new dividend policy, targeting a total payout of approximately $50 million in 2025.
The first dividend under this plan, set at 6 cents per share, will be paid on Jan. 31, 2025, to shareholders on record as of Jan. 15, 2025. Moreover, the board has authorized a 2025 share repurchase program of up to $250 million. Per Olivier Rabiller, president and CEO of Garrett, these measures are designed to provide a competitive dividend yield while emphasizing Garrett's commitment to creating shareholder value and investing strategically in its turbo and zero-emission technologies.
The framework leverages Garrett’s robust cash generation and flexible cost structure and aligns with its existing capital priorities. The company remains focused on balanced R&D investments, particularly in zero-emission solutions and expanding turbo technologies for hybrid and industrial applications. This initiative builds on Garrett's previous repurchase of $438 million in stock since the conversion of its Series A Preferred Stock through the third quarter of 2024 and its efforts to reduce debt by approximately $400 million during the same period.
While Garrett aims to return 75% or more of Adjusted Free Cash Flow to shareholders, actual returns will depend on market conditions, stock prices and alternative capital uses. Dividends and share repurchases will be managed at the board’s discretion and subject to applicable regulations. The repurchase program allows flexibility in timing and methods, including open market transactions, block trades, or private negotiations, and can be suspended or terminated as needed.
In the third quarter of 2024, Garrett reported net sales of $826 million, which declined from $960 million in the third quarter of 2023. As of Sept. 30, 2024, the company’s cash and cash equivalent amounted to $96 million, down from $259 million as of Dec. 31, 2024. Long-term debt totaled $1.46 billion, down from $1.64 billion as of Dec. 31, 2024.
GTX’s Zacks Rank & Key Picks
Garrett currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the auto space are Dorman Products, Inc. (DORM - Free Report) , Tesla, Inc. (TSLA - Free Report) and Blue Bird Corporation (BLBD - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved 75 cents and 88 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for TSLA’s 2024 sales suggests year-over-year growth of 2.97%. EPS estimates for 2024 have improved 22 cents in the past 60 days. EPS estimates for 2025 have improved 7 cents in the past seven days.
The Zacks Consensus Estimate for BLBD’s fiscal 2025 sales and earnings suggests year-over-year growth of 10.97% and 12.14%, respectively. EPS estimates for fiscal 2025 have improved 18 cents in the past 30 days.