Northrop Grumman‘s (NYSE: NOC) board of directors has approved a plan to repurchase $4 billion of the company’s common stock with the goal of retiring nearly 25 percent of the company’s outstanding shares by the end of 2015.
Northrop has 235 million shares outstanding as of March 31 and will use available cash balances and free cash flow to fund the repurchases, the company said Thursday.
Debt under Northrop’s current shelf registration could also help support the repurchases, the company said.
The board has also approved a quarterly dividend of 61 cents per share on the company’s common stock, 11 percent higher than the previous 55-cent dividend and representing the 10th consecutive annual increase in Northrop’s quarterly dividend.
“Today’s action and yesterday’s dividend increase reflect confidence in our performance and our belief that our share repurchase program continues to create value for our shareholders, ” said Wes Bush, chairman, chief executive officer and president.
Including this new plan, Northrop’s outstanding share repurchase authorizations total approximately $5 billion.