Wall Street cheered Friday as the board of directors at General Electric announced a 20% increase in the company’s quarterly dividend to 12 cents per share. The dividend will be paid October 25th to shareholders of record on September 20th.
GE’s stock shot up 3.3% on the news. GE, a Dow Jones Industrial Average component, is one of the world’s most widely held stocks. It is also the parent company of NBC Universal, pending the sale of a majority stake to Comcast.
GE had begun cutting its dividend in February 2009, when it had stood at 31 cents. The dividend cutting came in the face of financial pressures on the GE Capital unit.
“We are able to restore the GE dividend at a historical payout level for 2010 earlier than previously anticipated and to extend our share buyback program because of continued strong cash generation, recovery at GE Capital, and solid underlying performance in our Industrial businesses through the first half of 2010,” GE CEO Jeff Immelt said. “In addition, the Company continues to plan on capitalizing on strategic and financially attractive inorganic growth opportunities,” he added.
The company’s stock buybacks had been suspended in September 2008. The existing $15 billion buyback authorization still has $11.6 billion of capacity remaining.