Dell announces $5 billion share-buyback program

Dell Technologies Inc.
DELL,
+3.85%
offered a series of long-term guidance figures ahead of an analyst-day event Thursday. At the event, Dell plans to announce that it expects compound annual revenue growth of 3% to 4% through fiscal 2026, as well as compound annual growth in non-GAAP diluted earnings per share of at least 6% in the same span, according to a release. The company also intends to announce its expectation for net income to adjusted free-cash flow conversion of at least 100% during this span. Dell plans to announce the approval of a share-buyback program of up to $5 billion that becomes effective in November upon the expected completion of its VMware spinoff. The company intends to begin issuing a quarterly dividend “with an attractive yield” in the first quarter of fiscal 2023, subject to board approval. The company will be targeting an annual dividend of about $1 billion. It will also be aiming to return 40% to 60% of adjusted free-cash flow to shareholders through dividends and repurchases beginning in fiscal 2023. “We consider the details thus far to be net-positive – most notably a more meaningful capital return story,” Wells Fargo’s Aaron Rakers wrote in a note to clients. Dell shares are up 2.2% in premarket trading. They’re near flat over a three-month span, as the S&P 500
SPX,
+1.13%
has risen 3.5%.