Over the past year, Cavco Industries (CVCO) stock lost 1.5%, including dividends, while the S&P 500 returned 16.2%. The company consistently repurchased its own stock during that period. Over the three years to June 2026, Cavco reduced its diluted share count by 11.
Over the past year, Cavco Industries (CVCO) stock lost 1.5%, including dividends, while the S&P 500 returned 16.2%.
The company consistently repurchased its own stock during that period.
Over the three years to June 2026, Cavco reduced its diluted share count by 11.
Over the past year, Cavco Industries (CVCO) stock lost 1.5%, including dividends, while the S&P 500 returned 16.2%. The company consistently repurchased its own stock during that period. Over the three years to June 2026, Cavco reduced its diluted share count by 11.1%, giving each remaining share a larger claim on the business. Yet its profit fell over those same three years. So does a shrinking share count still pay a shareholder when the profit behind it is shrinking too?
Cavco’s Earnings Per Share Fell Less Than Its Profit
The buybacks cushioned the blow, softening the decline for each individual share without stopping it entirely. Cavco’s net income fell 7.3% a year over the three years to June 2026. Because the company spread those earnings across fewer shares, the decline translated to just 3.5% a year in diluted earnings per share. Investors now hold a larger fraction of the company, but total profit shrank faster than their ownership stakes grew. As a result, a shareholder’s earnings per share remain lower today than they were three years ago.
Cavco continues to buy. Over the latest twelve months, its buybacks came to 3.1% of its market value, net of the cost of stock pay for staff. This ongoing program steadily increases the ownership stake of each remaining share, even though the actual value of that stake ultimately depends on the share price.
How Cavco Pays For Its Buybacks
The company funds these repurchases using cash generated by its core housing operations. Over the latest twelve months, that cash easily covered the buyback program. Nearly all of Cavco’s sales come from factory-built housing, a segment that brought in $2.16 billion in fiscal 2026, up 11.6% from a year earlier. Over the latest twelve months, to June 2026, the company retained 9.6% of its sales as operating profit, compared with 10.1% a year before.
During that period, Cavco generated $235 million of free cash flow while spending $140 million on buybacks. Because the company pays no dividend, these share repurchases represent its only method of returning cash to shareholders. Its balance sheet also carries more cash than debt. At the end of June 2026, Cavco held $261 million of cash and short-term investments, against just $33.7 million of debt.
Averytin News Financial update.