Construction, power, and industrial sector services provider Argan (AGX +3.41%) served up a handsome gain for its shareholders on Thursday. Those folks were glad that their company is expanding its share buyback program and sticking to its dividend policy. On these tailwinds, Argan's stock rose by nearly 4% on the day.
A $50 million bump
Just after market close on Wednesday, Argan announced that its board of directors had green-lighted that expansion to the stock repurchase initiative, specifically from $150 million to $200 million. It also pushed the expiration date forward; this is now Jan. 31, 2030.
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In the same press release, Argan said it will dispense a quarterly dividend of $0.50 per share. This matches the previous two distributions. Before that, the company had dispensed just under $0.38 per share. The upcoming dividend is to be distributed on April 30 to investors of record as of April 22, and yields 0.3%.
The company quoted CEO David Watson as saying the expansion of the share buyback program "reflects Argan's strong and sustained cash generation, robust balance sheet and our conviction around the long-term demand environment for our capabilities."
NYSE: AGX
Key Data Points
The power of AI
Watson also waxed optimistic about Argan's present and future, saying that now is a thrilling time for the company, given the solid demand for its services.
I don't see that demand fading anytime soon. Argan is one of those companies getting plenty of work from the build-out of artificial intelligence (AI) technology, and unless it stumbles badly in some way, that alone should continue to feed it into at least the mid-term future. Many signs point up for this company now, and its stock is worth serious consideration as a buy.
