What happened

Shares of Wendy's (NASDAQ:WEN) popped today, up by 6% as of 12:45 p.m. EST, after the company boosted its capital return program. The company's board of directors authorized a 21% dividend increase and a new share repurchase program.

So what

The burger chain's quarterly dividend payment will increase from $0.07 per share to $0.085 per share, representing growth of 21%. The new payout will be effective starting with the next quarterly dividend payment, which is payable to shareholders of record as of March 1. Wendy's currently has approximately 239.5 million shares outstanding.

Exterior of a Wendy's restaurant

Image source: Wendy's.

The company is also implementing a new share repurchase program, with authorization of up to $175 million, and will fund the program with cash on hand and operating cash flow.

Now what

"We are pleased to announce a 21 percent increase in our quarterly dividend and a new share repurchase program as returning cash to shareholders remains a key priority for us," CEO Todd Penegor said in a statement. "This is now the 6th consecutive year that we have increased our dividend, which is a testament to the strong cash flow generation from our sustainable and predictable business model."

Wendy's had $186.6 million in cash and cash equivalents at the end of the fiscal third quarter (not including restricted cash), and generated $56.2 million in operating cash flow. The company reports fiscal fourth-quarter earnings on Feb. 22.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.