DaVita boosts share repurchase program by $2 billion

DENVER, CO - DaVita Inc . (NYSE:DVA), a leading healthcare company specializing in dialysis services, has announced significant changes to its corporate governance and an expansion of its share repurchase program. The company's board of directors has adopted amended and restated bylaws, effective immediately as of Thursday, which introduce revisions to the procedural mechanics and disclosure requirements for stockholder nominations and proposals.

The amendments to the bylaws, as detailed in the SEC filing, include updates to the procedures for stockholder meetings, the process for providing notice of meetings, and clarifications on the powers of the Chair of the Board and the Chief Executive Officer's authority to appoint company officers.

In a strategic financial move, DaVita's Board has also approved an additional $2 billion authorization for its existing share repurchase program. This new authorization comes on top of the existing share repurchase program initiated on December 17, 2021, which is still in effect.

The company clarified that the share repurchases could be executed through various means, including open market transactions, privately negotiated deals, or through existing agreements such as the Berkshire Share Repurchase Agreement.

DaVita has emphasized that the repurchase program does not have an expiration date, nor does it obligate the company to acquire any specific number of shares. The timing and volume of repurchases will be subject to market conditions, legal requirements, and other pertinent factors. The company retains the flexibility to suspend or adjust the program as necessary.

The forward-looking statements included in the SEC filing, such as the expectation of repurchase activities and potential impacts on the company's financial position, are based on current information and are subject to change. DaVita acknowledges the inherent risks and uncertainties associated with such statements and does not commit to updating them in the future except as required by law.

The changes to the bylaws and the expanded share repurchase program reflect DaVita's ongoing efforts to adapt its governance practices and optimize shareholder value. The information reported here is based on the latest SEC filing by DaVita Inc.

In other recent news, DaVita Inc. has been making significant strides in its financial performance. The company recently outperformed expectations for the second quarter of 2024, with an adjusted operating income of $506 million and adjusted earnings per share of $2.59.

These strong results have been attributed to strategic initiatives aimed at addressing the nursing shortage and improving revenue per treatment.

In addition to its robust quarterly performance, DaVita has also raised its adjusted operating income guidance for 2024. The company is actively pursuing growth through international acquisitions and share repurchases, solidifying its presence in the global market.

Truist Securities, in response to these developments, has revised its earnings estimates for DaVita upward. The firm now projects the company to achieve an adjusted earnings per share of $9.72 in 2024, up from the previous estimate of $9.46.

For 2025, the forecast has been raised to an adjusted EPS of $11.06, compared to the earlier prediction of $10.42. While the firm maintains a Hold rating on the stock, these revised projections reflect a positive outlook for DaVita's future financial performance.

InvestingPro Insights

In light of DaVita Inc.'s recent corporate governance changes and share repurchase program expansion, InvestingPro data and tips offer additional context for investors. According to InvestingPro data, DaVita boasts a market capitalization of $12.45 billion and a P/E ratio of 15.39, which adjusts to 14.44 when looking at the last twelve months as of Q2 2024. With a PEG ratio of 0.17 during the same period, the company presents a compelling case for growth at a reasonable price.

InvestingPro Tips highlight that management's aggressive share buybacks and a high shareholder yield are crucial factors for investors to consider. Notably, three analysts have revised their earnings upwards for the upcoming period, and the stock is trading at a low P/E ratio relative to near-term earnings growth, which could indicate an undervalued stock poised for potential growth. Moreover, DaVita is recognized as a prominent player in the Healthcare Providers & Services industry and has shown a strong return over the last year, with the stock trading near its 52-week high.

For those seeking more detailed analysis, additional InvestingPro Tips are available, providing a deeper dive into DaVita's financial health and market performance. With a total of 14 tips listed on InvestingPro's platform, investors can access a wealth of information to inform their investment decisions. The insights from InvestingPro suggest that DaVita's strategic financial maneuvers are backed by solid performance metrics and analyst optimism, offering a robust investment profile for those interested in the healthcare sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.