Boston, MA, 11/20/2013 (wallstreetpr) – Motor Company (NYSE:F) is largely back on its feet having made efforts to eliminate most of its debts. This huge success is attributed to its CEO Allan Mulally who took over the reigns at F in 2006. At the time, F was not a doing quite well, operating expenses were high and car sales were not satisfactory. But the story has since changed. Looking at the company’s balance sheet, we not only see the strength of this automaker, but also the potential it has.
If we say that F is an incredibly healthy balance sheet, why then hasn’t the company increased its dividend payout or raised its shares buyback budget? There are good reasons F hasn’t been pragmatic in raising this columns. I think that the company has all that is needed to return significant dollars to investors. The challenge is that F is having large payments to make. One such draining payment is that which goes into funded and non-funded pension plans and also payment to workers which the company terminated their services as it was transforming to a better and healthier auto company that it is today. These payments run into tens of billion of dollars. Had it not been that F is facing these huge obligations, raising its share repurchase scale and awarding investors with hefty dividends would just come naturally. But all is not lost considering that some the payments which the company is facing are one-time and it thus means that the next quarter would be better for investors in terms for higher dividends and large buyback.
Even in the face of this tight environment, F has avoided shares dilution by buying enough of its shares as anti-dilutive repurchases. So far in the year, the company has bought about 4.5 million of its shares priced at an average of $17.02 per piece. Subsequently, F has spent about $77 million in the anti-dilutive repurchases.