NEW YORK – Griffon Corporation (NYSE:GFF), a diversified management and holding company, announced Wednesday that its Board of Directors has approved an additional $400 million stock repurchase program. This new authorization follows the company’s previous buybacks, where Griffon repurchased 9.4 million shares, representing 16.4% of outstanding shares, at an average price of $48.74 per share, totaling $458 million since April 2023.
As markets opened today, Griffon indicated the full $400 million is available for the repurchase of common stock under the current program. This move underscores the company’s ongoing efforts to manage capital and deliver value to shareholders.
Griffon’s operations are segmented into Home and Building Products (HBP) and Consumer and Professional Products (CPP). HBP, operating through Clopay Corporation, is a leading manufacturer of garage and rolling steel doors in North America. CPP offers a range of branded tools, fans, and home organization products, with well-known brands such as AMES, Hunter, True Temper, and ClosetMaid.
The company’s statement also included a standard caution regarding forward-looking statements, reminding investors of the inherent risks and uncertainties that could affect actual results. These risks encompass a wide range of factors, from economic conditions and market competition to raw material costs and potential IT system vulnerabilities.
Griffon’s latest stock repurchase plan is part of its capital allocation strategy, aiming to optimize shareholder returns. The announcement is based on a press release statement from Griffon Corporation.
In other recent news, Baird has revised its price target for Griffon Corp (NYSE:), raising it from $84.00 to $92.00, while maintaining an Outperform rating. The firm’s analyst foresees a slight uptick in Griffon’s fiscal fourth-quarter results, primarily due to higher EBITDA in the Home & Building Products division resulting from favorable steel pricing. Despite expecting Griffon to provide conservative guidance, Baird continues to view Griffon as a top investment opportunity.
This optimism stems from anticipated sustained long-term HBP margins, recovery, and restructuring in the Consumer and Professional Products division, and more normalized leverage levels. These factors are expected to contribute to Griffon’s long-term value. As per Baird’s analysis, Griffon’s value proposition is solid when evaluated on price-to-earnings ratio, free cash flow, and sum-of-the-parts metrics, which are indicative of the company’s overall financial health and potential for investor returns. The adjustment in Griffon Corp’s stock price target reflects Baird’s confidence in the company’s future performance and value creation potential. These are among the recent developments for Griffon Corp.
InvestingPro Insights
Griffon Corporation’s (NYSE:GFF) recent announcement of a $400 million stock repurchase program aligns well with several key insights from InvestingPro. According to InvestingPro Tips, management has been aggressively buying back shares, and the company boasts a high shareholder yield. These factors directly support the company’s latest capital allocation decision.
The company’s financial health appears robust, with InvestingPro Data showing a market capitalization of $3.35 billion and a price-to-earnings ratio of 15.18 (adjusted for the last twelve months as of Q3 2024). This relatively low P/E ratio, combined with the InvestingPro Tip that GFF is trading at a low P/E ratio relative to near-term earnings growth, suggests that the stock may be undervalued, potentially justifying the buyback strategy.
Moreover, Griffon has demonstrated a commitment to shareholder returns, having raised its dividend for 4 consecutive years and maintained dividend payments for 14 consecutive years, as per InvestingPro Tips. This track record of consistent shareholder rewards complements the newly announced buyback program.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Griffon Corporation, providing a deeper understanding of the company’s financial position and market performance.
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