General Motors Company (NYSE:GM) shares gained more than 5% after the automaker boosted its quarterly dividend and initiated a $6 billion share buyback.
The company is raising its dividend by $0.03 from $0.12 to $0.15 per share, marking a 25% increase.
The new quarterly dividend rate will take effect with the company’s next planned dividend, expected to be declared in April.
“The GM team’s execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders,” GM CEO Mary Barra said in a statement.
The share repurchase program has no expiration date and will be executed at the company’s discretion.
Further, the company said it has entered into an accelerated share repurchase program for $2 billion of its stock.
“We feel confident in our business plan, our balance sheet remains strong, and we will be agile if we need to respond to changes in public policy,” GM chief financial officer Paul Jacobson said in a statement. “The repurchase authorization our board approved continues a commitment to our capital allocation policy.”
Shares of GM added 5.1% at $49 late morning on Wednesday.