KB Home Increases Share Repurchase Authorization by 3M Shares

KB Home (KBH), a home building company based in the United States, announced that its board of directors have increased the company’s common stock repurchase authorization to up to five million shares from approximately two million shares.

The buyback plan comes with no expiration date and repurchases will be carried out as and when determined by KB Home in the open market or private transactions.

Along with the buyback plan, the company declared a quarterly cash dividend of $0.15 per share. The dividend is payable on August 19 to stockholders of record on August 5, 2021. (See KB Home stock chart on TipRanks)

Chairman, President and CEO of KB Home Jeffrey Mezger said, “As our business continues to generate a significant level of operating cash flow, we are using a consistent and balanced approach in allocating our capital, by investing in our future growth, addressing our debt maturities, and returning cash to stockholders, with one of the highest dividend yields in our industry.”

Last month, Raymond James analyst Buck Horne reiterated a Buy rating on the stock with a price target of $55 (41.6% upside potential from current levels).

Horne said, “We think the market is potentially missing the magnitude of KBH’s pricing power and margin upside potential, even as deliveries remain constrained by various supply chain restrictions.”

The analyst added that with the average selling price in the second quarter witnessing growth, along with lower debt costs, earnings are expected to go higher.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 4 Buys and 2 Holds. The average KB Home price target of $55 implies 41.6% upside potential from current levels.

According to TipRanks’ Smart Score system, KB Home gets a 6 out of 10, which indicates that the stock is likely to perform in line with market averages.