How Is Charter Communications Improving Shareholder Value?

Repurchasing shares is one of the ways in which Charter Communications (CHTR) is returning value to its shareholders. In the fourth quarter, it repurchased 4.3 million shares worth $1.4 billion. In 2018, the company spent $5.1 billion on share buybacks.

Charter believes that share buybacks have been a good opportunity to invest in its business. The company is also looking at accretive merger and acquisition opportunities to produce an impressive return on capital.

Repurchasing shares has numerous potential effects on a company and its stock. It can improve a company’s EPS, a closely watched metric in a company’s earnings report. It can also reduce the effects of stock dilution. As we can see in the chart above, Charter reported adjusted EPS of $1.29 in the fourth quarter compared to $1.14 in the fourth quarter of 2017.

In comparison, Comcast’s (CMCSA) adjusted EPS rose ~30.6% YoY (year-over-year) to $0.64 in the fourth quarter. In the integrated US telecommunications space, Verizon’s (VZ) adjusted EPS rose ~30.2% YoY to $1.12, while AT&T’s (T) adjusted EPS rose ~10.3% YoY to $0.86 in the fourth quarter.