U.S. carrier Matson (NYSE: MATX) has announced plans to increase its quarterly dividend and repurchase 3 million shares representing nearly $190 million in returned capital to shareholders.
The company’s Board of Directors on Thursday declared a third quarter dividend of $0.30 per common share, representing a 30.4 percent increase over the prior dividend. The dividend will be paid on September 2, 2021 to all shareholders of record as of the close of business on August 5, 2021.
The Board has also approved a stock buyback totaling three million shares, or approximately seven percent of outstanding common shares. As of June 24, 2021, the authorization represents approximately $190 million of potential repurchases. Shares will be repurchased in the open market from time to time at Matson’s discretion and may be suspended or discontinued at any time.
“We are pleased to announce this return of capital to shareholders,” said Matt Cox, Matson’s Chairman and Chief Executive Officer. “The substantive increase in the dividend and the initiation of a new share buyback program reflects our Board’s confidence in long-term free cash flow growth. Last May we successfully launched a second expedited ocean service from China to the U.S. West Coast, the CLX+, to accommodate overwhelming demand for our original expedited China-to-Long Beach service. The success of the CLX+ service is expected to continue to be a driver in free cash flow growth.”
Mr. Cox added, “After re-setting our dividend to this new level and providing maintenance capital expenditures to support ongoing operations, we will maintain our investment-grade balance sheet while also continuously seeking to acquire businesses and drive organic growth opportunities that meet our investment criteria. We will be both disciplined and opportunistic in our capital allocation, including the execution of share repurchases and aligning dividend decisions with growth in our long-term free cash flow. As always, we remain committed to return excess cash to shareholders as another means to create additional shareholder value over the long term.”
Matson is the leading U.S. carrier in the Pacific, serving Hawaii, Alaska, and Guam, and to other island economies in Micronesia. Matson also operates two premium, expedited services from China to Long Beach, California, provides service to Okinawa, Japan and various islands in the South Pacific, and operates an international export service from Dutch Harbor to Asia.