The board of directors of Mastercard (NYSE:MA) has declared the company's latest quarterly common stock dividend. The credit card giant also launched a new large-scale stock repurchase program to replace an existing initiative.
The dividend will be $0.44 per share, a 10% increase over its predecessor. This is to be paid next Feb. 9 to investors of record as of Jan. 8. At the most recent closing share price, this would yield slightly over 0.5%.
Similar to archrival Visa (NYSE:V), Mastercard's dividend has never been particularly high-yielding. That said, the company has paid one consistently for many years, and habitually raises it once annually around December. Since the beginning of 2015, the payout has risen more or less steadily from $0.16 per share to the current level.
Again like Visa, Mastercard prefers to devote its cash to shareholder buybacks. Its new $6 billion repurchase program is smaller than a preceding initiative in which the company was authorized to buy back up to $8 billion worth of stock. The former will kick in once the latter is completed. Mastercard said that around $3.8 billion in potential buybacks remain in the older one.
Neither Visa nor Mastercard actually provides credit to holders of their cards. They therefore are not exposed to pandemic-induced massive credit default risks that many in the financial industry fear. Still, both companies have struggled in the withered global economy of late. Mastercard's Q3 featured a 14% drop in revenue and a 27% decline in non-GAAP (adjusted) net profit.
On Tuesday, Mastercard basically traded sideways, lagging behind the modest gain of the S&P 500 index on the day.