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Oracle Continues to Reward Shareholders with Dividends, Buybacks

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Oracle’s cash flows

Oracle (ORCL) has strong cash flows, and it regularly uses those cash flows for share buybacks and dividend payments. In the fourth quarter of fiscal 2019, Oracle’s cash and cash equivalents were $20.5 billion, down from $21.6 billion in the previous year’s period.

The company delivered total operating cash flows of $14.6 billion in fiscal 2019, lower than the previous year’s $15.4 billion. Its capex in the year was $1.66 billion compared to $1.74 billion in fiscal 2018.

Share repurchases

During the quarter, the company repurchased 112 million shares for $6 billion. However, the buyback amount was lower than in the previous three quarters, when the company repurchased shares worth $10 billion in each quarter.

In fiscal 2019, Oracle’s buybacks totaled 735 million shares worth $36 billion, much higher than the company’s repurchases of $11.5 billion in fiscal 2018. Oracle has lowered its share count by ~25% in the past five years.

Dividends

Apart from share buybacks, Oracle’s board has announced a quarterly cash dividend of $0.24 per share, which will be paid on July 31 to its shareholders of record as of July 17. Its annual dividend of $0.96 per share represents a dividend payout ratio of 31.3% and a yield of 1.82% as of June 19. In comparison, Oracle’s peers Microsoft, Symantec, and IBM have dividend yields of 1.36%, 1.49%, and 4.73%, respectively, as of June 19.

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