Karat Packaging Inc. announced a regular quarterly dividend of $0.45 per share, payable on November 28, 2025 to shareholders of record as of November 21, 2025. The dividend represents a 12.5 % increase from the $0.40 per share paid in Q3 2024 and marks the third consecutive year the company has raised its dividend, underscoring management’s confidence in the firm’s cash‑flow generation and profitability.
The board also authorized the company’s first share‑repurchase program, allowing it to buy back up to $15 million of common stock with no expiration date and the flexibility to modify, suspend, or terminate the program at its discretion. The program can be executed in the open market or through private negotiations, and represents roughly 3 % of the company’s $479 million market capitalization. The timing of the buyback—when KRT is trading near its 52‑week low—suggests management believes the shares are undervalued and that returning capital to shareholders will support the stock price.
Karat’s recent financial performance provides context for the capital‑return decisions. In Q2 2025 the company reported revenue of $124 million, up 10.1 % from the prior year, and an EPS of $0.57, beating the consensus estimate of $0.56. The earnings beat was driven by strong demand in the core disposable foodservice segment and disciplined cost management, which helped offset modest increases in raw‑material costs. In contrast, analysts expect Q3 2025 revenue to rise to $124 million but an EPS of $0.39, a 17 % decline from the $0.45 reported in Q3 2024, reflecting the company’s focus on growth at the expense of short‑term earnings per share.
CEO Alan Yu emphasized the company’s financial strength, stating, “Today’s announcement of a new share‑repurchase program, along with our regular quarterly dividend, reflects the board and management’s continued confidence in Karat’s growth potential and financial resilience.” Yu’s comments highlight the firm’s solid liquidity—its current ratio stands at 2.68 and its Altman Z‑Score is 4.39—supporting the decision to return capital while maintaining a strong balance sheet.
InvestingPro analysis notes that Karat is currently undervalued relative to its fair value, with a robust current ratio and a high Altman Z‑Score indicating low bankruptcy risk. The combination of a rising dividend, a new buyback program, and strong cash‑flow generation positions the company to capitalize on future opportunities while rewarding shareholders.
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