How Juniper Is Returning Capital to Shareholders
Juniper returns $162.8 million to shareholders
Juniper Networks (JNPR) returns value to its shareholders through a combination of dividends and stock repurchases. In 2Q17, the company distributed $37.8 million in dividends and spent $125 million on repurchases. The network equipment maker returned a combined $162.8 million to shareholders in the June quarter. The payout was almost the same for the prior quarter and the year-ago quarter.
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Juniper makes payout pledge
The chart shows Juniper’s dividend and repurchase payouts for the last several quarters. Juniper, which is competing with Cisco (CSCO), F5 Networks (FFIV), and Arista (ANET) in the network gear market, has committed to return about 50% of its free cash flow to shareholders this year. The commitment is inclusive of dividends and share repurchases. As part of this payout commitment, Juniper is planning to distribute a quarterly cash dividend of $0.10 per share on September 22.
It’s important to point out that Juniper defines free cash flow as net cash from operations less capital expenditures.
Making payout promises come true
To keep its payout promise, Juniper CFO Ken Miller said the company is focused on growing and diversifying revenues, expanding earnings, and optimizing capital structure. The company is banking on strong execution to grow sales and operating expenses discipline to expand earnings so that it can generate enough cash to meet the committed payout.
In driving top-line growth and diversification, Juniper is looking to the cloud computing market. Its sales to the cloud market rose 32% in the latest quarter. Data center build-outs by the likes of Amazon (AMZN) and Microsoft (MSFT) are giving business to network solution vendors.