Teck Resources (TSX:TECKa) Limited (NYSE:TECK) has received approval from the Toronto Stock Exchange to initiate a share buyback program. The company plans to repurchase up to 40 million class B subordinate voting shares, which represents approximately 7.8% of its outstanding shares and about 7.9% of the public float as of November 15, 2023.
The buyback is set to start on November 22, 2023, and will span over the course of one year. Teck Resources will carry out the transactions through the Toronto Stock Exchange, New York Stock Exchange, and other eligible Canadian and U.S. trading systems. The share repurchase plan also allows for private agreements under an issuer bid exemption order or block purchases that adhere to regulation guidelines.
This strategic move aligns with Teck Resources’ efforts to manage its capital effectively. Share buybacks are a common method for companies to return value to shareholders, as they can potentially increase earnings per share and return on equity by reducing the number of shares outstanding.
InvestingPro Insights
In line with the recent developments, InvestingPro provides some valuable metrics and tips for a more comprehensive understanding of Teck Resources' financial landscape. Based on the latest data, Teck Resources boasts an adjusted market capitalization of $18,731.59 million. Its P/E ratio stands at 11.63, indicating a relatively low valuation compared to its earnings. As of Q3 2023, the company's revenue was reported at $10,339.12 million, although the growth rate has been in the negative, at -21.4%.
The InvestingPro Tips reveal some interesting aspects as well. Despite a downward revision of earnings by 5 analysts for the upcoming period and an increase in total debt, Teck Resources has maintained its dividend payments for 14 consecutive years, which could be a silver lining for income-focused investors. Moreover, the company is predicted to be profitable this year and has been profitable over the last twelve months.
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