Shares of SAIC (SAI) are up 5% today after the company announced late yesterday a special $1 per share dividend, payable on June 28.
“We consider this a demonstration of our continuing confidence in the strength of our financial base, our plan of balanced capital deployment, and our commitment to deliver shareholder value,” said John Jumper, CEO.
It also didn’t hurt that fourth-quarter earnings and revenue beat Wall Street estimates, according to FactSet.
My colleague David Englander wrote a bullish Stock Alert about SAIC last week (sub required):
In the next 12 months, the company plans to spin off its slower-growing government information-technology services business. The remaining company will deliver solutions focused on fast-growing, high-priority industries like national security, health care and engineering.
The spinoff could unlock significant value. Cai von Rumohr, who covers SAIC for Cowen, estimates that SAIC is worth $17 a share on a sum-of-the-parts basis. Over the next 18 months, as SAIC completes the spinoff, he thinks that value could be realized, implying over 35% upside.
After today’s rise, SAIC has gained about 20% this year.
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