Illinois Tool Works (NYSE:ITW) has crafted a higher payout for its shareholders. The company declared a quarterly distribution of $0.42 per share, to be paid on October 8 to shareholders of record as of September 30. That amount is $0.04, or 10.5%, higher than the company's preceding disbursement of $0.38; this was paid last month.

The new dividend annualizes to $1.68 per share, yielding 2.3% at Illinois Tool Works' current stock price of $74.24.

The company also authorized a buyback program for up to $6.0 billion worth of its common stock. The program is open-ended, and does not have an expiration date. It adds to what's left of the existing repurchase initiative; as of June 30, $1.2 billion remained of the original $4.0 billion authorized in May 2011.

Currently, Illinois Tool Works has just under 450 million shares outstanding.

Fool contributor Eric Volkman has no position in Illinois Tool Works. The Motley Fool recommends Illinois Tool Works. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.