MarketBeat.com tracked numerous buyback announcements in September, and the month is still ongoing. Buybacks are a sign of corporate strength and help build shareholder value, but not all buybacks are equal. Buybacks that reduce share count and build value can help drive stock prices higher over time; buybacks that only partially offset dilution are another story, and money going down a hole.

These are the stocks that present value to investors with robust, share count-reducing stock buybacks. 

Rockwell Automation Buyback Plans Will Build Value

Rockwell Automation (NYSE: ROK) is the world’s largest industrial-focused automation company. It struggles with growth in 2024 but can sustain ample cash flow, balance sheet, health, and capital returns. The company announced a new $1 billion buyback authorization this month, giving evidence of the same. The board increased the existing allotment to $1.35 billion, or about 4.6% of the market cap, with shares trading near $255, and they are reducing the count.

The share count was down 1.2% average at the end of Q3, accelerating from the 0.75% reduction posted last year. 

Repurchases are compounded by a dividend, which is worth nearly 2.0% on an annualized basis. The distribution is safe and growing with a payout ratio below 50%, long-term debt at less than 1X equity, and a fourteen-year history of increases. Sixteen analysts rate the stock as a Hold, with sentiment firming in recent revisions and expecting a 10% upside at the consensus. 

Helen of Troy Share Repurchases Reduced the Count by 2%

Helen of Troy (NASDAQ: HELE) has faced its share of hurdles and struggles over the past few years, but one thing is clear: This battle-tested consumer goods company has good management and rock-solid financials that can stand the test of time. The latest update is a new $500 million share repurchase authorization that replaces the old one. After an aggressive repurchase increase this year, the old one was worth only $55 million. The new $500 million is worth about 40% of the stock, a significant figure made more substantial by the pace of repurchases in Q1.

The Q1 activity reduced the count by 2% compared to last year, and this pace may be expected to continue. The balance sheet is a fortress with total debt at roughly 0.5X equity; revenue and earnings growth are expected to resume within three to four quarters. Three analysts rate this stock as a Hold. It presents a deep value today, trading 18% below the lowest forecasted price target. 

Autohome Inc. Buys Back Shares, Pays a High Dividend Yield

Autohome Inc. (NYSE: ATHM) is a digital automobile marketplace operating in China. It is a growing company with a healthy cash flow and a high-yielding dividend that gives insulated exposure to China’s EV market. The buyback news is that it initiated a $200 million authorization with an expiration date of twelve months. The expiration date is no guarantee, but it suggests that robust repurchases will be made this year, reducing the share count by 4.5% compared to the market valuation at the time of release. 

MarketBeat.com tracks two analysts rating this stock. They peg it at a Hold and see it trading near fair value at $28. However, with only two revisions issued this year, the target has a low conviction. The institutional interest is more significant and bullish on balance for three consecutive quarters, increasing the total holdings to over 64% and providing a tailwind for the market.

The stock is trading at rock bottom levels, with shares moving up from the critical support level and bullish signals in the indicators, so upward movement is expected to continue. The signals aren’t strong, but the risk-reward profile is skewed in favor of the upside because the clearest target for strong resistance is about 30% above the current action.