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Charter Communications Continues to Spend on Buybacks

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May. 6 2019, Published 11:27 a.m. ET

Charter rewards shareholders

Charter Communications (CHTR) has been rewarding its shareholders with share buybacks. In the first quarter, the company repurchased 2.9 million shares worth $1.0 billion. Since September 2016, the company has repurchased ~$20.7 billion of its common stock.

Charter thinks that share buybacks have been a good opportunity to invest in the business. The company would also look at accretive merger and acquisition opportunities to create a good return on capital.

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Share repurchases are considered a more tax-efficient way to enhance shareholders’ returns compared to dividend payments. Repurchasing shares results in a decline in the number of a company’s outstanding shares, which boosts its EPS. As you can see in the above chart, Charter reported an adjusted EPS of $1.11 in the first quarter—compared to $0.70 in the first quarter of 2018.

Peer comparison

Comcast’s (CMCSA) adjusted EPS rose ~22.6% YoY (year-over-year) to $0.76 in the first quarter. Dish Network (DISH) hasn’t reported its financial results for the same quarter. Analysts expect Dish Network’s adjusted EPS to fall ~5.7% YoY to $0.66.

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